The IRS recently issued Notice 2016-70, which extends certain 2017 deadlines for employer information reporting under the Affordable Care Act on coverage offered to individuals during the 2016 calendar year. The Notice also extends the original “good faith transition relief” for ACA information reports that reporting entities file in 2017.
30 Day Extension of Deadline to Provide Information Reports to Individuals
The IRS granted reporting entities, including employers and plan sponsors, a 30-day extension to provide 2016 information reports to employees and other covered individuals (on Forms 1095-C and 1095-B). These reports, initially due to individuals on January 31, 2017, must now be provided to individuals by March 2, 2017. Notably, the IRS did not grant a similar extension for the information reports that must be filed with the IRS (on Forms 1094-C, 1095-C, 1094-B and 1095-B). Reporting entities therefore still need to provide copies of these 2016 information reports to the IRS by February 28, 2017 if filing by mail, and by March 31, 2017 if filing electronically.
The original reporting rules allow employers and plan sponsors to request a 30-day extension to provide these information reports to employees and the IRS. Under the new guidance, the IRS stated that it will not grant automatic 30-day deadline extensions for the reports that must be provided to individuals. Employers and plan sponsors may, however, seek a 30-day extension for the requirement to file the reports with the IRS.
Good Faith Transition Relief
The notice also extends the good faith transition relief for ACA information reports that are filed in 2017. The guidance provides relief to employers and plan sponsors from penalties under Code sections 6721 and 6722 if the entity submits an incorrect or incomplete information report. The relief is unavailable to entities that fail to file (or provide to an employee) an information report by the extended deadline.
While the upcoming change in the Presidential administration has raised questions about the future of the Affordable Care Act, it is important that employers and plan sponsors continue to comply with the ACA’s information reporting requirements and the law’s other substantive requirements. It is far from clear at this point what will happen with the ACA, and many commentators believe that any changes to the law (including changes to the ACA’s information reporting requirements) may not take effect immediately. So, until official guidance is issued, it is important for employers and plan sponsors to continue to comply with all applicable aspects of the ACA.