Employee Benefits-IRS Extends Due Date For ACA Reporting

In Notice 2016-70, the Internal Revenue Service (“IRS”) extended the due date for providing information returns required under the Affordable Care Act (the “ACA”).  More specifically, the Notice extends the due date, from January 31, 2017, to March 2, 2017, for furnishing to individuals:

–the 2016 Form 1095-B, Health Coverage, required to be furnished by providers of “minimum essential coverage” (such as employers and insurers) under section 6055 of the Internal Revenue Code (the “Code”), and

–the 2016 Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, required to be furnished by “applicable large employers” under section 6056 of the Code.

The Notice also extends good faith transition relief from the penalties under section 6721 and 6722 of the Internal Revenue Code (the “Code”) to the 2016 information reporting requirements under sections 6055 and 6056.

The term “minimum essential coverage” generally means self-insured employer-provided group health coverage or insured health care coverage bought on an ACA market exchange.  An “applicable large employer” is generally an employer with 50 or more full-time employees, including full-time equivalent employees, in the previous year.

Note that the Notice does NOT extend the due date for filing with the IRS the 2016 Forms 1094-B, 1095-B, 1094-C, or 1095-C, which remains February 28, 2017, if not filing electronically, or March 31, 2017, if filing electronically.  Automatic extensions remain available for these forms under the regulations (See Treas. Reg. § 1.6081-1; Temp. Treas. Reg. § 1.6081-8T).

Employers or other coverage providers that do not comply with the due dates for furnishing Forms 1095-B and 1095-C to individuals (as extended under the rules described above) or for filing Forms 1094-B, 1095-B, 1094-C, or 1095-C with the IRS are subject to penalties under section 6722 or 6721 for failure to timely furnish and file, respectively.  However, employers and other coverage providers that do not meet the relevant due dates should still furnish and file.  The IRS will take such furnishing and filing into consideration when determining whether to abate penalties for reasonable cause.  Also, the IRS is providing transition relief from penalties under sections 6721 and 6722 to reporting entities that can show that they made good-faith efforts to comply with the information-reporting requirements for 2016.  This relief applies only to incorrect and incomplete information reported on the statement or return, and not to a failure to timely furnish or file a statement or return.