A Short Reprieve from ACA Reporting Deadlines May Be Allowed
Last month we summarized the ACA information reporting requirements that become effective in early 2016. A short thirty day reprieve from these obligations may be available, according to the IRS spokesperson who recently held a payroll industry telephone conference call. Employers will be able to request an extension of the reporting deadlines for: (a) filing information returns with IRS, and (b) furnishing ACA statements to payees. The forms that may be extended include: (1) Form 1094-B, (2) Form 1094-C, (3) Form 1095-B, and (4) Form 1095-C. An extension may be requested from the IRS by using Form 8809 (Application for Extension of Time to File Information Returns). This form is already used to request an extension of the filing deadline for Forms W-2 and 1099, and has been revised to include boxes that can be checked for ACA information returns. The form may be accessed here: http://www.irs.gov/pub/irs-pdf/f8809.pdf
The instructions in this form indicate that if the request for an extension is timely filed, an automatic 30-day extension of the information return filing deadline will be allowed. An additional 30-day extension may also be provided if: (i) the first automatic 30-day extension was granted by IRS, and (ii) the request for an additional extension is filed before the expiration of the original automatic 30-day extension. Employers are encouraged to remain diligent in their preparations for meeting the reporting obligations, and ensure that they are capturing the relevant information needed to complete the required forms.
The IRA Invites Comments on the “Cadillac Tax”
The IRS recently issued a notice regarding the “Excise Tax on High Cost Employer-Sponsored Health Coverage,” commonly referred to as the “Cadillac Tax.” http://www.irs.gov/pub/irs-drop/n-15-52.pdf. The ACA’s 40% excise tax, set to become effective beginning in 2018, originally received this name because it will apply to more expensive health insurance plans historically referred to as “Cadillac Plans.” However, industry professionals have projected that this tax will affect roughly 26% of ALL health plans in the first year it becomes effective, leading us to believe it should be referred to as the “Ford” or “Honda” tax. Some employers have already announced changes to their plans to avoid triggering the Cadillac tax, and it is anticipated that more employers will start phasing in changes such as higher deductibles, capping of tax preferred savings accounts, and cutting of covered services as 2018 nears. Alliances among employer groups, unions, and health insurance companies have formed to lobby Congress to repeal the tax, while other employer advocates are lobbying for a two year transition period to allow employers time to structure benefit design changes.
IRS Notice 2015-52 describes potential approaches to many of the issues that have been raised in regard to the Cadillac Tax and invites comments on these potential approaches. In this Notice, the IRS specifically requests comments on terms such as “applicable coverage” and “the person that administers the plan benefits,” as well as on the practical challenges presented by the application of aggregating employers pursuant to Section 49801 of the ACA. Additional issues to be considered, and for which comments are invited, include the allocation of contributions to HSAs, FSAs and HRAs, as well as its suggested approach to formulating tables allowing for age and gender adjustments to the baseline, per- employee dollar limits currently set to trigger the excise tax ($10,200 for self only coverage and $27,500 for other than self-coverage). Comments to Notice 2015-52 must be submitted no later than October 1, 2015.
Clarification and Revisions to SBCs
The timing and apportionment of the duty to provide a Summary of Benefits and Coverage (SBC) were recently clarified in the Federal Register, with changes to take effect on the first day of the first open enrollment period that begins on or after September 1, or the start of the first plan year after that date if there is no “open enrollment period.” A new template has also been released, but will not apply until open enrollment in the Fall of 2016, or to coverage in plan years beginning on or after January 1, 2017. http://www.gpo.gov/fdsys/pkg/FR- 2015-06-16/pdf/2015-14559.pdf.