This post was authored by Heather DeBlanc and Stephanie Lowe

On December 28, 2015, the Internal Revenue Service (“IRS”) released Notice 2016-4, which generously extends the due dates for the 2015 information reporting requirements.  The purpose of the extension is to allow employers and other providers additional time to adapt and implement procedures for gathering, analyzing, and reporting health coverage information for the 2015 calendar year.

Internal Revenue Code (“IRC”) section 6056 requires Applicable Large Employers (“ALE”) (generally, those with 50 or more full-time employees, including full-time equivalents) to file and furnish annual information returns and statements related to offered health coverage by a specified due date.  IRC section 6055 requires self-insuring employers to also file and furnish annual information regarding coverage provided by a specified due date.  The final regulations impose a penalty on employers who fail to timely file a return (or who file an incorrect or incomplete return) and employers who fail to timely furnish a written statement to employees.  The IRS has extended both the due date to furnish written statements to individuals and the due date to file returns with the IRS.

Employers are required to furnish a written statement to each employee they report on.  The IRS has extended the due date for furnishing the following written statements from February 1, 2016 to March 31, 2016:

• Form 1095-B (Health Coverage); and
• Form 1095-C (Employer-Provided Health Insurance Offer and Coverage)

The penalty for failing to timely provide a correct written statement to an employee is $250 per statement (up to $3,000,000).

The IRS has extended the due date for employers to file the following returns from February 29, 2016 to May 31, 2016, if filed by hard copy in the mail and from March 31, 2016 to June 30, 2016, if filed electronically:

• Form 1094-B (Transmittal of Health Coverage Information Returns);
• Form 1095-B (Health Coverage);
• Form 1094-C (Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns); and
• Form 1095-C (Employer-Provided Health Insurance Offer and Coverage)

Employers filing more than 250 returns are required to e-file their returns.  Which forms an employer files depends on the type of employer and the type of coverage offered or sponsored.

Which Forms Do I File? 

Forms 1094-C, 1095-C, 1094-B, and 1095-B can be found on the IRS website.  Instructions for forms 1094-C and 1095-C can be found here.  Instructions for forms 1094-B and 1095-B can be found here.

Since the due dates have been extended, automatic and permissive extensions of time for filing returns and furnishing statements will not apply to the extended due dates.  Employers should view the extended period as a grace period and should furnish statements and file the information returns as soon as they are ready.  The IRS will be prepared to accept filed forms beginning in January 2016.

Employers should avoid coming close to missing these extended due dates at all costs because the potential penalties may be great.  The penalty for failure to timely file a correct return is $250 per return (up to $3,000,000).  The penalty for intentional disregard of the filing requirements is $500 per return (with no calendar year cap).  Employers that do not meet the extended due dates should still furnish statements and file returns since the IRS will take such actions into consideration in determining whether to abate penalties for reasonable cause.

The due date extensions may affect the information available to individual employees at the time they file their taxes.  An employee is not eligible for a premium tax credit for any month in which the employee is eligible for coverage under an eligible employer-sponsored plan that provides minimum value and is affordable.  Employers report information about the offered coverage in Form 1095-C and that information assists employees in determining their eligibility for the premium tax credit.  Since the due date for Form 1095-C has been extended beyond the date individuals must file their income tax returns, some employees may not know whether they are eligible for a premium tax credit before filing their returns.  For 2015 only, the IRS will not require individuals to amend their income tax returns once they receive their Forms 1095-C from their employers.  Individuals can rely upon other information from employers about their offers of coverage for determining their eligibility for the premium tax credit.

To view IRS Notice 2016-4, see https://www.irs.gov/pub/irs-drop/n-16-04.pdf.

More Information

You may find additional information on the ACA at http://www.lcwlegal.com/ACA.

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