IRS Extends Deadline to Supply ACA Forms to Employees

Forms now due to employees by March 2; deadline for reporting to the IRS unchanged

Stephen Miller, CEBS By Stephen Miller, CEBS December 22, 2017
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The IRS has extended by 30 days—until March 2, 2018—the due date for distributing 2017 health coverage information forms to employees. The deadlines for filing these forms with the IRS were not changed.

The IRS, which announced the extension Dec. 22 in Notice 2018-06,  also said it will not impose penalties on employers that can show that they made good-faith efforts to comply with the Affordable Care Act's (ACA's) information-reporting requirements for plan year 2017.

Self-insured employers and all employers with 50 or more full-time equivalent employees—known as applicable large employers—now have until March 2, 2018, to provide Form 1095-B, Health Coverage, or Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, to employees covered by the employer's health plan, which is a 30-day extension from the original due date of Jan. 31.

Employees may use this information to determine whether, for each month of the calendar year, they may claim the premium tax credit on their income tax returns.

"Because of these extensions, individuals may not receive their Forms 1095-B or 1095-C by the time they are ready to file their 2017 individual income tax return," the IRS said in a news release. "While information on these forms may assist in preparing a return, the forms are not required to file."

Taxpayers can prepare and file their returns using other information about their health coverage received from their employer—such as their W-2 form—to show they had ACA-compliant health coverage during the year, the IRS pointed out.

The extension on distributing Forms 1095-B or 1095-C to employees is automatic. Employers don't have to request it, said Edward Fensholt, J.D., senior vice president and director of compliance services at Lockton, a benefits brokerage and consultancy based in Kansas City, Mo. "As a result of this automatic 30-day extension, [a different] 30-day extension that would normally be available upon a showing of good cause is not available. That is, the March 2 deadline is now a hard deadline," he explained.

Despite the extended deadline, the IRS is encouraging employers to furnish these forms to emploiyees as soon as they are able.

[SHRM members-only toolkit: Complying with and Leveraging the Affordable Care Act]

IRS Filing Deadlines Not Extended

The due dates for filing 2017 information returns with the IRS, however, were not extended. The due dates to file information returns with the IRS remain:

  • Feb. 28 for paper filers.
  • April 2 for electronic filers.

"Employers filing at least 250 Forms 1095-C with the IRS must do so electronically unless they obtain a waiver from the IRS," Fensholt noted. "Employers may obtain an automatic 30-day extension from the deadlines for filing with the IRS by submitting Form 8809 on or before those deadlines."

Good-Faith Exemption Extended

Notice 2018-06 also extends good-faith transition relief. As in previous years, employers will be able to use the good-faith efforts standard to protect themselves from filing information returns or payee statements with inaccurate or incorrect information.

The IRS said it will continue to apply to 2017 filings the same "good faith" approach to employer ACA filings that applied to filings for the 2015 and 2016 calendar years, Fensholt noted. "This relief applies only to incorrect and incomplete information reported on Form 1095-C or 1095-B, and not to a failure to timely furnish or file the forms."

"This relief could apply, for example, to missing or inaccurate taxpayer identification numbers or dates of birth included in the forms," noted Timothy Jost, a professor at the Washington and Lee University School of Law in Lexington, Va., in a Health Affairs blog post. In determining good faith, "the IRS will consider whether reasonable efforts were made to gather and transmit necessary information and steps that are being taken to comply fully for 2018," he explained.

Future Relief Not Expected

"Although this is the third year that the IRS has granted transition relief for reporting, the notice states significantly that the IRS does not anticipate granting transition relief for 2018 or future years," Jost pointed out. "This statement highlights the fact that, although the individual mandate penalty is repealed as of 2019, the reporting requirements that support it, as well as the employer mandate, remain in effect."

Related SHRM Articles:

What the Individual Mandate Repeal Means for Employers, SHRM Online Benefits, December 2017

IRS Begins to Send ACA Penalty Letters, SHRM Online Benefits, November 2017

Prepare for ACA Information Reporting in Early 2018, SHRM Online Benefits, October 2017

Not Every Aspect of Form 1095-C Can Be Outsourced, SHRM Online Employment Law, October 2017

‘Where’s My 1095?’ Addressing Tax Filing ConfusionSHRM Online Benefits, February 2016

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