Following complaints, concerns and continuing questions relating to the Affordable Care Act reporting requirements, the IRS has relaxed reporting deadlines for 2016 in the form of IRS Notice 2016-4.
As you may be aware, the Affordable Care Act placed information reporting requirements on providers of minimum essential coverage, including insurers, self-insuring employers (26 U.S.C. § 6055) and “applicable large employers,” defined as entities employing fifty or more full-time employees on average in the prior year (26 U.S.C. § 6056). These reports will be used by both individuals and the IRS in determining whether individuals must make an individual shared responsibility payment and, in the case of applicable large employers, whether the employer has met the employer shared responsibility requirements.
Although both categories require reports to be submitted to the individual and the IRS, the reporting requirements vary depending on the category in which the employer falls. If the employer is an insurer, self-insuring employer or other provider of minimum essential coverage, the employer only needs to provide information detailing the coverage provided and the months of coverage. If the employer is an applicable large employer, the reporting requirements are a bit more intensive. Applicable large employers must track information on a monthly basis for each employee to report that 1) coverage has been offered, 2) the coverage meets the minimum value requirement and 3) the coverage is affordable. While seemingly simple enough in form, this information has proved to be difficult to gather, forcing many employers to scramble in order to meet deadlines.
Due to the volume of questions and complaints stemming from the difficulty in implementing these reporting standards, the IRS issued Notice 2016-4, automatically extending the deadlines for the information reporting requirements for 2016. Therefore, the deadline for transmitting reports to individuals and employees using Form 1095-B or Form 1095-C has been moved to March 31, 2016, while the deadlines for reporting information to the IRS using Form 1094-B or Form 1094-C has been moved to May 31, 2016 (if submitting hard copies) or to June 30, 2016 (if submitting electronically). Keep in mind, if an employer will be submitting 250 or more information returns, it is required to submit these forms electronically.
What impact could a missed deadline have on an employer? Although monetary penalties are a possibility, the IRS has indicated it will use a reasonable cause standard to determine the amount of penalties to assess, if any. Thus, the IRS will take into account whether good faith efforts were made to comply with the reporting requirements. Those who cannot meet the newly extended deadlines are therefore encouraged to file and furnish as soon as possible.