Tag: section 6055

Client Alert: Delay of Deadline to Furnish Forms 1095-B and 1095-C to Individuals & Related Relief

Statements to Individuals

The Internal Revenue Service (“IRS”) has extended the deadline for 2020 Information Reporting by employers (and other entities) to individuals under Internal Revenue Code sections 6055 and 6056 by just over a month. However, the deadline for these entities to file with the Internal Revenue Service (IRS) remains the same.

IRS Notice 2020-76 extends the due dates for the following 2020 information reporting Forms from January 31, 2021 to March 2, 2021:

  • 2020 Form 1095-C, Employer-Provided Health Insurance Offer and Coverage
  • 2020 Form 1095-B, Health Coverage

Please note that no further extension beyond the March 2, 2020 deadline is allowed. Therefore, this deadline for furnishing the Forms to individuals must be met. 

Reporting to IRS

However, the due dates for filing these Forms and their Transmittals with the IRS remains unchanged. Specifically, the due date for filing the following documents with the IRS is February 28 for paper filings; however, if filing electronically, the due date is March 31 (employers who are required to file 250 or more Forms must file electronically):

  • 2020 Form 1094-B, Transmittal of Health Coverage Information Returns, and the 2020 Form 1095-B, Health Coverage
  • 2020 Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns, and the
  • 2020 Form 1095-C, Employer-Provided Health Insurance Offer and Coverage

Additional extensions may still be available for filing these Forms with the IRS.

Penalty Relief for Form 1095-B Statement to Responsible Individuals

The Notice addresses that as the individual shared responsibility payment was reduced to zero for months beginning after December 31, 2018, and because an individual will not need the information on Form 1095-B to compute his or her federal tax liability or to file an income tax return with the IRS, the Treasury Department and the IRS have determined that relief from penalties associated with furnishing a statement under section 6055 is appropriate. Therefore, the IRS will not assess a penalty under section 6722 against reporting entities who fail to furnish a Form 1095-B to responsible individuals if two conditions are met: 

  • First, the reporting entity posts a notice prominently on its website stating that responsible individuals may receive a copy of their 2020 Form 1095-B upon request, accompanied by an email address and a physical address to which a request may be sent, as well as a telephone number that responsible individuals can use to contact the reporting entity with any questions.
  • Second, the reporting entity furnishes a 2020 Form 1095-B to any responsible individual upon request within 30 days of the date the request is received.

This relief does not extend to the requirement that applicable large employers (ALEs) must furnish Forms 1095-C to full-time employees.  Those statements must continue to be provided.  However, the penalty relief will apply to employees enrolled in an ALE’s self-insured health plan who are not full-time employees for any month of 2020.

Last Year for Good-Faith Transition Relief

IRS Notice 2020-76 also extends the good-faith transition relief from Code section 6721 and 6722, which are the Code sections imposing penalties for filing incorrect or incomplete information on the return or statement. Specifically, entities showing that they have made good faith efforts to comply may avoid penalties for incorrect or incomplete information reporting.  However, relief is not available to entities who fail to file returns or furnish the statements, miss a deadline, or otherwise had not made good faith efforts to comply.  The Notice states that in determining good faith, the IRS “will take into account whether an employer or other coverage provider made reasonable efforts to prepare for reporting the required information to the Service and furnishing it to employees and covered individuals, such as gathering and transmitting the necessary data to an agent to prepare the data for submission to the IRS or testing its ability to transmit information to the IRS.” However, this is the last year the IRS and Treasury Department intend on providing this transition relief.

Indications this may be the Last Year for Statement Relief

Last, the IRS indicates that unless it receives comments explaining why the relief afforded in this notice continues to be necessary, no relief relating to the furnishing requirements under sections 6055 and 6056 will be granted in future years.  

  • Taxpayers and reporting entities are strongly encouraged to submit comments electronically via the Federal eRulemaking Portal at www.regulations.gov (type “IRS- 2020-0037” in the search field on the regulations.gov homepage to find this notice and submit comments).  
  • Alternatively, taxpayers and reporting entities may mail comments to: Internal Revenue Service, Attn: CC:PA:LPD:PR (Notice 2020-76) Room 5203, P.O. Box 7604, Ben Franklin Station, Washington, D.C. 20044
  • Comments must be submitted by February 1, 2021.

You can find the full Notice here: https://www.irs.gov/pub/irs-drop/n-20-76.pdf.

If you should have questions regarding employer reporting requirements or other ACA mandates, the Employee Benefits Department at Fraser Trebilcock can assist.

We have created a response team to the rapidly changing COVID-19 situation and the law and guidance that follows, so we will continue to post any new developments. You can view our COVID-19 Response Page and additional resources by following the link here. In the meantime, if you have any questions, please contact your Fraser Trebilcock attorney.

Elizabeth H. Latchana specializes in employee health and welfare benefits. Recognized for her outstanding legal work, in both 2019 and 2015, Beth was selected as “Lawyer of the Year” in Lansing for Employee Benefits (ERISA) Law by Best Lawyers, and in 2017 as one of the Top 30 “Women in the Law” by Michigan Lawyers Weekly. Contact her for more information on this reminder or other matters at 517.377.0826 or elatchana@fraserlawfirm.com.

Brian T. Gallagher is an attorney at Fraser Trebilcock specializing in ERISA, Employee Benefits, and Deferred and Executive Compensation. He can be reached at (517) 377-0886 or bgallagher@fraserlawfirm.com.

Client Alert: Delay of Deadline to Furnish Forms 1095-B and 1095-C to Individuals

Statements to Individuals

The Internal Revenue Service (“IRS”) has extended the deadline for 2019 Information Reporting by employers (and other entities) to individuals under Internal Revenue Code sections 6055 and 6056 by just over a month. However, the deadline for these entities to file with the Internal Revenue Service (IRS) remains the same.

IRS Notice 2019-63 extends the due dates for the following 2019 information reporting Forms from January 31, 2020 to March 2, 2020:

  • 2019 Form 1095-C, Employer-Provided Health Insurance Offer and Coverage
  • 2019 Form 1095-B, Health Coverage

Please note that no further extension beyond the March 2, 2020 deadline is allowed. Therefore, this deadline for furnishing the Forms to individuals must be met. 

Reporting to IRS

However, the due dates for filing these Forms and their Transmittals with the IRS remains unchanged. Specifically, the due date for filing the following documents with the IRS is February 28, 2020 for paper filings; however, if filing electronically, the due date is March 31, 2020 (employers who are required to file 250 or more Forms must file electronically):

  • 2019 Form 1094-B, Transmittal of Health Coverage Information Returns, and the 2019 Form 1095-B, Health Coverage
  • 2019 Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns, and the
  • 2019 Form 1095-C, Employer-Provided Health Insurance Offer and Coverage

Additional extensions may still be available for filing these Forms with the IRS.

Good-Faith Transition Relief

IRS Notice 2019-63 also extends the good-faith transition relief from Code section 6721 and 6722, which are the Code sections imposing penalties for filing incorrect or incomplete information on the return or statement. Specifically, entities showing that they have made good faith efforts to comply may avoid penalties for incorrect or incomplete information reporting.  However, relief is not available to entities who fail to file returns or furnish the statements, miss a deadline, or otherwise had not made good faith efforts to comply.  The Notice states that in determining good faith, the IRS “will take into account whether an employer or other coverage provider made reasonable efforts to prepare for reporting the required information to the Service and furnishing it to employees and covered individuals, such as gathering and transmitting the necessary data to an agent to prepare the data for submission to the Service or testing its ability to transmit information to the Service.”

Penalty Relief for Form 1095-B Statement to Responsible Individuals

Last, the Notice addresses that as the individual shared responsibility payment was reduced to zero for months beginning after December 31, 2018, the IRS and Department of Treasury are continuing to analyze if and how the section 6055 reporting requirements should change in the future.  Comments are requested.  However, because an individual will not need the information on Form 1095-B to compute his or her federal tax liability or to file an income tax return with the IRS, the Treasury Department and the IRS have determined that relief from penalties associated with furnishing a statement under section 6055 is appropriate.  Therefore, the IRS will not assess a penalty under section 6722 against reporting entities who fail to furnish a Form 1095-B to responsible individuals if two conditions are met: 

  • First, the reporting entity posts a notice prominently on its website stating that responsible individuals may receive a copy of their 2019 Form 1095-B upon request, accompanied by an email address and a physical address to which a request may be sent, as well as a telephone number that responsible individuals can use to contact the reporting entity with any questions.
  • Second, the reporting entity furnishes a 2019 Form 1095-B to any responsible individual upon request within 30 days of the date the request is received.

This relief does not extend to the requirement that applicable large employers (ALEs) must furnish Forms 1095-C to full-time employees, whether or not self-insured health plans.  Those statements must continue to be provided.  However, the penalty relief will apply to employees enrolled in an ALE’s self-insured health plan who are not full-time employees for any month of 2019.

You can find the full Notice here: https://www.irs.gov/pub/irs-drop/n-19-63.pdf.

If you should have questions regarding employer reporting requirements or other ACA mandates, the Employee Benefits Department at Fraser Trebilcock can assist.

Elizabeth H. Latchana, Attorney Fraser TrebilcockElizabeth H. Latchana specializes in employee health and welfare benefits. Recognized for her outstanding legal work, in both 2019 and 2015, Beth was selected as “Lawyer of the Year” in Lansing for Employee Benefits (ERISA) Law by Best Lawyers, and in 2017 as one of the Top 30 “Women in the Law” by Michigan Lawyers Weekly. Contact her for more information on this reminder or other matters at 517.377.0826 or elatchana@fraserlawfirm.com.

Client Alert: Delay of Deadline to Furnish Forms 1095-B and 1095-C to Individuals

Delay of Deadline to Furnish Forms 1095-B and 1095-C to Individuals

The Internal Revenue Service (“IRS”) has extended the deadline for 2018 Information Reporting by employers (and other entities) to individuals under Internal Revenue Code sections 6055 and 6056 by just over a month. However, the deadline for these entities to file with the Internal Revenue Service (IRS) remains the same.

IRS Notice 2018-94 extends the due dates for the following 2018 information reporting Forms from January 31, 2019 to March 4, 2019:

  • 2018 Form 1095-C, Employer-Provided Health Insurance Offer and Coverage
  • 2018 Form 1095-B, Health Coverage

Please note that no further extension beyond the March 4, 2019 deadline is allowed. Therefore, this deadline for furnishing the Forms to individuals must be met.

However, the due dates for filing these Forms and their Transmittals with the IRS remains unchanged. Specifically, the due date for filing the following documents with the IRS is February 28, 2019 for paper filings; however, if filing electronically, the due date is April 1, 2019 (employers who are required to file 250 or more Forms must file electronically):

  • 2018 Form 1094-B, Transmittal of Health Coverage Information Returns, and the 2018 Form 1095-B, Health Coverage
  • 2018 Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns, and the 2018 Form 1095-C, Employer-Provided Health Insurance Offer and Coverage

Additional extensions may still be available for filing these Forms with the IRS.

As a result of these extensions, individuals might not receive a Form 1095-B or Form 1095-C by the time they file their 2018 tax returns. In such case, IRS Notice 2018-94 explains that individual taxpayers may instead rely on other information received from their employers or other coverage providers for purposes of filing their tax returns and do not need to wait to receive Forms 1095-B and 1095-C before filing. Once they do receive their forms, the individuals should keep it with their tax records. You can find the full Notice here: https://www.irs.gov/pub/irs-drop/n-18-94.pdf.

IRS Notice 2018-94 also extends the good-faith transition relief from Code section 6721 and 6722 (which are the Code sections imposing penalties for failing to timely file an information return, filing incorrect or incomplete information, failing to timely furnish an information return, or furnishing an incorrect or incomplete information statement). Specifically, entities showing that they have made good faith efforts to comply may avoid penalties for incorrect or incomplete information reporting.  However, relief is not available to entities who fail to file returns or furnish the statements, miss a deadline, or otherwise had not made good faith efforts to comply.  The Notice states that in determining good faith, the IRS “will take into account whether an employer or other coverage provider made reasonable efforts to prepare for reporting the required information to the Service and furnishing it to employees and covered individuals, such as gathering and transmitting the necessary data to an agent to prepare the data for submission to the Service or testing its ability to transmit information to the Service.”

Last, the Notice addresses that as the individual shared responsibility payment is being reduced to zero for months beginning after December 31, 2018, the IRS and Department of Treasury are analyzing if and how the section 6055 reporting requirements should change in the future.

The links to the Final Forms and Instructions are below:

2018 Forms for Applicable Large Employers (Code Section 6056):

2018 Forms for Employers who Self-Fund (Code Section 6055):

These instructions and forms reflect only minor changes, such as a few formatting modifications and the reflection of indexed penalty amounts for reporting failures.  The increased penalties are now as follows for 2018 tax year returns (and may be waived in certain circumstances):

  • The penalty for failure to file a correct information return is $270 for each return for which the failure occurs, with the total penalty for a calendar year not to exceed $3,275,500.
  • The penalty for failure to provide a correct payee statement is $270 for each statement for which the failure occurs, with the total penalty for a calendar year not to exceed $3,275,500.
  • Special rules apply that increase the per-return and per-statement and total penalties with no maximum limitations if there is intentional disregard of the requirement to file the returns and furnish recipient statements.

Additionally, the instructions for Forms 1094-B and 1095-B also now state that health insurance issuers and carriers are encouraged (but not required) to report coverage in catastrophic health plans enrolled in through the Marketplace for months in 2018.

The remainder of the provisions remain intact, including the mandatory electronic filing for Forms reaching the 250-return threshold.

If you should have questions regarding employer reporting requirements or other ACA mandates, the Employee Benefits Department at Fraser Trebilcock can assist.

Elizabeth H. Latchana, Attorney Fraser TrebilcockElizabeth H. Latchana specializes in employee health and welfare benefits. Recognized for her outstanding legal work, in both 2018 and 2015, Beth was selected as “Lawyer of the Year” in Lansing for Employee Benefits (ERISA) Law by Best Lawyers, and in 2017 as one of the Top 30 “Women in the Law” by Michigan Lawyers Weekly. Contact her for more information on this reminder or other matters at 517.377.0826 or elatchana@fraserlawfirm.com.

Client Alert: IRS Releases Final ACA Employer Reporting Forms & Instructions (1094-B, 1094-C, 1095-B, and 1095-C)

IRS Releases Final ACA Employer Reporting Forms & Instructions (1094-B, 1094-C, 1095-B, and 1095-C)

The Internal Revenue Service (“IRS”) has finalized Forms 1094/1095-B and 1094/1095-C for the 2018 tax year, as well as their related instructions, which are required to be filed under the Affordable Care Act.

As provided in previous Client Alerts, information reporting requirements are applicable under two Internal Revenue Code (“Code”) sections as follows:

  • Section 6055 for insurers, self-insuring employers, and certain other providers of minimum essential coverage; and
  • Section 6056 for applicable large employers.

By way of background, the IRS requires applicable large employers and sponsors of self-insured health plans to report on the health coverage offered and/or provided to individuals beginning calendar year 2015. Although the reporting requirements extend to other entities that provide “minimum essential coverage” (such as health insurance issuers), this Client Alert focuses on the requirements imposed on employers.

Employers who are deemed applicable large employers, as well as employers of any size who offer self-funded health coverage, must carefully review and study these instructions, which set forth numerous details, definitions and indicator codes that must be used to complete the requisite forms. The instructions address the “when, where and how” to file, extensions and waivers that may be available, how to file corrected returns, and potential relief from penalties imposed for incorrect or incomplete filing.

The IRS utilizes information from these returns to determine which individuals were offered minimum essential coverage, whether individuals were eligible for premium tax credits in the Marketplace, as well as to determine any penalties to be imposed on employers under Pay or Play (Code section 4890H; Shared Responsibility for Employers Regarding Health Coverage, 26 CFR Parts 1, 54, and 301, 79 Fed. Reg. 8543 (Feb. 12, 2014)). Due to the impact of proper reporting, a clear understanding of these forms and instructions is essential.

Code section 6056 applies to applicable large employers (generally employers with at least 50 full-time employees, including full-time equivalent employees). Information with respect to each full-time employee (whether or not offered coverage) must be reported on Form 1095-C. Transmittal Form 1094-C must accompany the Forms 1095-C; all the Forms 1095-C together with the Transmittal Form 1094-C constitute the Code section 6056 information return that is required to be filed with the IRS. For applicable large employers who self-insure, there is a separate box to complete which incorporates the information required under Code section 6055.

Code section 6055 applies to employers of any size who self-insure. Non-applicable large employers with self-funded plans must report their information on Form 1095-B, as well as on Transmittal Form 1094-B. All of the Forms 1095-B together with the Transmittal Form 1094-B constitute the Code section 6055 information return that is required to be filed with the IRS. Again, if the employer who self-insures is also an applicable large employer, the employer will instead use Forms 1095-C and 1094-C, which include a section for self-insured plans.

Employers subject to these requirements must report in early 2019 for the entire 2018 calendar year.

Additionally, employers must provide informational statements to the individuals for whom they are reporting. Form 1095-C or Form 1095-B (as applicable) may be used as this informational statement.

The links to the Final Forms and Instructions are below:

2018 Forms for Applicable Large Employers (Code Section 6056):

2018 Forms for Employers who Self-Fund (Code Section 6055):

These instructions and forms reflect only minor changes, such as a few formatting modifications and the reflection of indexed penalty amounts for reporting failures.  The increased penalties are now as follows for 2018 tax year returns (and may be waived in certain circumstances):

  • The penalty for failure to file a correct information return is $270 for each return for which the failure occurs, with the total penalty for a calendar year not to exceed $3,275,500.
  • The penalty for failure to provide a correct payee statement is $270 for each statement for which the failure occurs, with the total penalty for a calendar year not to exceed $3,275,500.
  • Special rules apply that increase the per-return and per-statement and total penalties with no maximum limitations if there is intentional disregard of the requirement to file the returns and furnish recipient statements.

Additionally, the instructions for Forms 1094-B and 1095-B also now state that health insurance issuers and carriers are encouraged (but not required) to report coverage in catastrophic health plans enrolled in through the Marketplace for months in 2018.

The remainder of the provisions remain intact, including the mandatory electronic filing for Forms reaching the 250-return threshold.

Deadlines for distribution and filing are:

  • January 31, 2019 to furnish returns to individuals
  • February 28, 2019 for paper filing with the IRS
  • April 1, 2019 for electronic filing with the IRS

There is no current indication of filing deadline relief, so it is essential to ensure your reporting and collection of data procedures are intact.

If you should have questions regarding employer reporting requirements or other ACA mandates, the Employee Benefits team at Fraser Trebilcock can assist.

Elizabeth H. Latchana, Attorney Fraser TrebilcockElizabeth H. Latchana specializes in employee health and welfare benefits. Recognized for her outstanding legal work, in both 2018 and 2015, Beth was selected as “Lawyer of the Year” in Lansing for Employee Benefits (ERISA) Law by Best Lawyers, and in 2017 as one of the Top 30 “Women in the Law” by Michigan Lawyers Weekly. Contact her for more information on this reminder or other matters at 517.377.0826 or elatchana@fraserlawfirm.com.