Since 2015, the Affordable Care Act (“ACA”) has required employers and insurers to annually complete, file with the Internal Revenue Service (“IRS”) and distribute to employees and other covered individuals information about minimum essential coverage (Form 1095-B) and about health plan coverage (Form 1095-C) (“ACA Individual Forms”).
The annual statutory deadline for furnishing the ACA Individual Forms is January 31 of following year. However, given the short window, the Treasury Department and the IRS have extended this deadline at least 30 days every year since 2015.
In 2020, the Treasury Department and the IRS indicated prior deadline relief may not continue for 2021. However, in response to comments regarding the importance of the deadline extension, the Treasury Department and the IRS have now proposed regulations (“ACA Reporting Rules”) that would make permanent the 30-day extension of time to furnish the ACA Individual Forms. If the 30th day (March 2) falls on a weekend or legal holiday, the deadline is the following business day.
Taxpayers may rely on the ACA Reporting Rules and the 30-day deadline extension for 2021 reporting (now due by March 2, 2022) and for subsequent years as long as the ACA Reporting Rules remain in place. There is no application or approval required to utilize the deadline extension.
The ACA Reporting Rules do not change the due dates for submitting the ACA Individual Forms to the IRS: February 28 (when filing by paper) and March 31 (when filing electronically).
The ACA Reporting Rules provide relief regarding the distribution of the ACA Individual Forms. As long as there is no ACA tax penalty for individuals who fail to have health coverage, certain employers will not be required to automatically distribute the ACA Individual Forms as long as the employer posts a notice on its website that the ACA Individual Forms are available upon request and provides a copy of the ACA Individual Form to the requestor within 30 days of the request. Please note that this relief is not available regarding full-time employees of employers with self-insured group health plans. However, employers sponsoring self-insured group health plans may take advantage of this relief regarding individuals who were not full-time employees in any month of the year, such as retirees and COBRA participants.
The ACA Reporting Rules are not all good news, as they eliminate the “good-faith” relief previously available for reporting incorrect or incomplete information on ACA Individual Forms. Paying attention to compliance with the ACA Reporting Rules is more important than ever.