ACA Reporting Relief – Written Statement to Covered Individuals Now Due March 2, 2018; Good Faith Penalty Relief Extended

Category: Special Bulletins
Date: Jan 4, 2018 03:38 PM
ACA Reporting Relief – Written Statement to Covered Individuals Now Due March 2, 2018; Good Faith Penalty Relief Extended

1. Written Statement to Covered Individuals Now Due March 2, 2018 for the 2017 Calendar Year Reporting Period

The Internal Revenue Service (IRS) has issued an automatic, 30-day extension for applicable large employers to furnish IRS Forms 1095-B and 1095-C to covered individuals.  For the 2017 reporting period, these forms are now due to individuals on March 2, 2018, rather than January 31, 2018.

Internal Revenue Service (IRS) regulations require applicable large employers (those with 50 or more full-time equivalent employees ) to file information returns and a transmittal to the IRS (Forms 1094-C and 1095-C) reporting the health coverage the applicable large employer offered to its ACA full-time employees each calendar year.  IRS regulations also require employers who offer self-insured health plans (plans where the employer pays claims, not just premiums) to file information returns and a transmittal to the IRS (Forms 1094-B and 1095-B) reporting the covered participants.  The required forms (1094-B or 1094-C, and 1095-B or 1095-C) are due to the IRS on or before February 28th (or March 31st if filing electronically) each year.   The IRS has not yet extended this deadline.

In connection with these filings, the IRS requires the employer filing the returns to furnish the responsible individual identified on the return with a written statement regarding coverage each calendar year (Form 1095-B or 1095-C).  This can be a copy of the Forms the employer intends to file with the IRS.  These written statements (or copies of the Forms to be filed) must be furnished to covered individuals on or before January 31st of each year following the calendar year to which the statement relates.

However, as in prior years, the IRS has extended the due date for furnishing these written statements (or copies of IRS Forms 1095-B and C) to covered individuals by 30 days.  Thus, for the calendar year ending December 31, 2017, employers that are required to furnish individuals with a Form 1095 will have until March 2, 2018 to do so.

Notably, this extension eliminates an employer’s ability to request a 30-day extension for furnishing information to individuals.  Thus, the new deadline is inflexible.  In addition, the extension does NOT apply to those forms an employer is required to file with the IRS. This means that Form 1094 (B or C) and Form 1095 (B or C) will still be due to the IRS on or before February 28th (or March 31st if filing electronically), unless the employer applies for an extension of time under normal extension rules.

2. Good Faith Penalty Relief Extended for Incorrect or Incomplete Information Returns and Statements to Covered Individual

As in prior years, the IRS has also granted short-term penalty relief for those reporting entities that can demonstrate they made good-faith efforts to comply with information-reporting requirements, both to individuals and for filing with the IRS, reported on a return or statement.  Importantly, this relief applies only to those entities that file or provide individuals with incorrect or incomplete information reports.  It does not apply to those entities that do not make a good-faith effort to comply with IRS reporting regulations, or to those that fail to timely file or furnish a statement or return altogether.   To determine “good faith,” the IRS will consider what steps the employer took to reasonably prepare for reporting and furnishing information, and what steps the employer is taking to ensure compliance with reporting requirements for 2018.

For further detail regarding the extension of relief provided by the IRS, see IRS Notice 2018-06.

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