IRS Announces Short Extension in Affordable Care Act Reporting

The Patient Protection and Affordable Care Act ("ACA") imposes reporting requirements on providers of minimum essential coverage (including insurers and employers that self-insure health benefits) about the coverage provided. In addition, large employers (generally those with 50 or more full-time and full-time equivalent employees in the prior year) must report about the health coverage offered by the employer to its full-time employees. The reporting requirements are effective for 2015, with the first reports due in 2016 for 2015 coverage.

The new reporting requirements require employers to provide certain information reports to full-time employees and others who are enrolled in coverage (Form 1095-B and Form 1095-C). Employers must also provide certain reports to the Internal Revenue Service ("IRS") (Form 1094-B and Form 1094-C). The IRS will use the information to determine whether an employer has complied with the ACA requirement to offer affordable, minimum value health coverage to full-time employees and their dependent children or whether the employer will owe a penalty. The IRS will also use the information to determine individual compliance with the requirement that most individuals maintain minimum essential health coverage or pay a penalty, and to determine individual eligibility for a premium tax credit for coverage purchased through a health insurance marketplace.

These reports were initially due in February and March of 2016. The IRS announced yesterday that the due date for filing certain reports has been extended, as follows:

• The due date for providing the reports to full-time employees and others enrolled in coverage (IRS Forms 1095-B and 1095-C) has been extended from February 1, 2016 to March 31, 2016.
• The due date for filing returns with the IRS (IRS Forms 1094-B and 1094-C) has been extended from February 29, 2016 to May 31, 2016 if not filing electronically, and from March 31, 2016 to June 30, 2016 if filing electronically.

The current reporting guidance provides for automatic and permissive extensions of the time for filing the reports; however, these extensions will not apply to the newly announced extended deadlines.

The filing extension may affect some individuals if they do not receive the Form 1095-B or 1095-C before they file their income tax returns. As a result, for 2015 only, individuals who rely on other information received from employers or coverage providers about their coverage or offers of coverage for purposes of determining eligibility for the premium tax credit when filing their income tax returns will not need to amend their returns once they receive their Form 1095-B or 1095-C or any corrected Form 1095-B or 1095-C.

The reporting requirements and forms are complicated. Large employers should familiarize themselves with the reporting requirements by gathering the information needed for reporting and making sure that systems are in place to capture the information for purposes of reporting. Guidance on the new reporting requirements is available on the IRS website: 

Instructions for Forms 1094-B and 1095-B

Instructions for Forms 1094-C and 1095-C

Questions and Answers on Reporting of Offers of Health Insurance Coverage by Employers (Section 6056)

Information Reporting by Applicable Large Employers

Questions and Answers on Information Reporting by Health Coverage Providers (Section 6055).

If you have any questions, please contact Nancy Farnam at nfarnam@clarkhill.com | (248) 530-6333; Doug Ellis at dellis@clarkhill.com | (412) 394-2367; Kristi Gauthier at kgauthier@clarkhill.com | (480) 684-1300; Ed Hammond at ehammond@clarkhill.com | (248) 988-1821; or another member of Clark Hill's Labor and Employment Practice Group.