Last week, the IRS released draft 2016 instructions for the 1094-B and 1095-B (the “B” Forms).  The release of the draft instructions is just weeks after the IRS released the draft instructions for the 1094-C and 1095-C Forms. (see our blog post)  Notwithstanding a few clarifications and additions, the draft instructions for the B Forms are quite similar to the 2015 instructions.  We have summarized some of the changes below:

• The draft instructions for the B Forms provide that insurers must report coverage under qualified health plans sold in the individual market through an Exchange on Form 1095-A, but coverage under group policies sold through a Small Business Health Options Program (SHOP) must be reported on Form 1095-B.
• The draft instructions also encourage insurers to report 2016 coverage under catastrophic health plans on Form 1095-B. Currently under the proposed Code Section 6055 regulations, insurers would be required to report coverage under a catastrophic plan starting with 2017 coverage.
• The draft instructions emphasize that excepted benefits should not be reported.
• The draft instructions added an example explaining that providers that were required to file electronically may file corrected forms on paper provided they are correcting fewer than 250 forms.
• The draft instructions also change the language regarding the “relief from penalties” to state that penalties may be waived “if the failure was due to reasonable cause and not willful neglect.”

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