Even though the IRS, cautioned employers last year not to expect future extensions to the January 31st deadline for filing ACA reporting in a final regulation published on December 15th, 2022, the IRS made permanent certain filing relief that had been previously offered. The final regulations include an automatic 30-day extension for providing Forms 1095-B and 1095-C to covered individuals and employees, which would otherwise be due on January 31; will allow an alternative method of furnishing the forms to certain individuals, and; eliminate prior good faith relief from penalties, which the IRS has been granting reporting entities whose ACA Forms were incomplete or inaccurate.
The key changes made by the IRS in the final regulations are summarized below.
Extended Deadline to Issue Forms 1095-B and 1095-C (to Individuals)
In new proposed regulations, the IRS would permanently extend by 30 days the deadline for employers to distribute individual statements to full-time employees that indicate whether their employer-sponsored health insurance met ACA requirements for minimum essential coverage.
The new deadline for furnishing Forms 1095-B or 1095-C to employees, permanently extends the deadline by 30 days. The original deadline for these reports is January 31, thus making the new deadline is March 2 (or March 1 for leap years), codifying the IRS’s prior practice of granting temporary 30-day extensions each year.
It is important to note that, as with the temporary extensions, the final regulations do not extend the deadline for reporting entities to file Forms 1094-B and 1094-C with the IRS.
The ACA requires applicable large employers (ALEs)—employers that during the prior year had 50 or more full-time employees or the equivalent when part-time employees’ hours are combined—to submit reporting forms to the IRS and to distribute these forms to employees by the following deadlines:
| ACA Requirement | Deadline |
|---|---|
|
1095 forms delivered to employees |
Jan. 31, 2023
(automatic extension to March 2) |
|
1094 – C
Paper filing with IRS* |
Feb. 28, 2023** |
|
1094 – C
Electronic filing with IRS |
March 31, 2023** |
*Employers that file 250 or more information returns with the IRS must file the returns electronically.
**Filers can obtain a 30-day extension on filing forms with the IRS by submitting Form 8809—Application for Extension of Time to File Information Returns—by the filing due date.
Source: IRS
Alternative Method of Furnishing Forms 1095-B and 1095-C
As of 2019, the individual mandate penalty has been reduced to zero. As a result, an individual does not need the information on Form 1095-B to calculate their federal tax liability or file a federal income tax return. Beginning with the 2021 calendar year, the IRS has provided an alternative manner for a reporting entity to furnish statements to individuals under Section 6055. This alternative method applies for all years when the individual mandate penalty is zero.
Under this alternative manner of furnishing, the reporting entity must post a clear and conspicuous notice on its website stating that responsible individuals may receive a copy of their statement upon request. The notice must include an email address, a physical address to which a request may be sent and a telephone number to contact the reporting entity with any questions. Additionally, the notice must be written in plain, non-technical terms and in a large enough font size to call to a viewer’s attention that the information pertains to tax statements reporting that individuals had health coverage. The reporting entity must furnish a copy of the form within 30 days of a request.Reporting entities must post the notice by the due date for furnishing ACA statements and must generally retain the website notice until Oct. 15.
ALEs offering self-insured health plans are generally required to use Form 1095-C, Part III, to meet the Section 6055 reporting requirements, instead of Form 1095-B. A self-insured ALE may use this relief for employees who are enrolled in the ALE’s self-insured plan and are not full-time employees of the ALE, as well as for non employees (e.g., former employees) who are enrolled in the self-insured plan. However, an ALE may not use the alternative method of furnishing for full-time employees who are enrolled in the self-insured plan.
For insurers and multi-employer plans, this relief applies to the requirement to provide Forms 1095-B to all covered individuals.
Transitional Good Faith Relief Eliminated
From 2015 through 2020, the IRS has provided reporting entities with transitional good faith relief from penalties for reporting incorrect or incomplete information on returns or individual statements if the entities could show that they made good faith efforts to comply with the requirements. This transitional relief from penalties and reporting incorrect and/or incomplete information is discontinued and will no longer b available to those filing.
