Over the holidays, Congress and the IRS were working hard on reviewing due dates for important dates concerning the Affordable Care Act (ACA). These extended deadlines come at a great time for employers, offering them more time to ensure all deadlines are met.
Cadillac Tax delay
On December 18th President Obama signed a tax bill offering employers an additional 2-year reprieve from the Cadillac Tax. This tax delays the effective date of the excise tax on high-cost health plans until January 1st, 2020.
The new law also announced that any Cadillac Tax paid by a provider, or an employer that sponsors a self-insured plan, is now tax deductible. This deduction cushions the effect of this tax on employers. Other specifications of the Cadillac Tax remain the same and are detailed in this previous blog post.
This delay has come about following criticism from employers, insurers, unions and lawmakers. Although this delay may indicate the first step towards repeal, experts are encouraging employers to continue evaluating the costs of health coverage and begin to consider alternatives to reduce exposure to the tax in 2020.
Affordable Care Act (ACA) Reporting Deadlines Extended
The due dates for certain ACA reporting requirements have been extended this year. This extension offers employers an additional two months to provide forms to employees, and close to three months to submit forms to the IRS.
For Small Employers
The due date for employers to provide form 1095-B to employees is now March 31st. This date gives employers an additional two months to provide employees with this information. Taking this into account, employees who submit their tax returns before receiving these forms will not be required to amend their tax return.
Small employers are required to submit form 1094-B to the IRS by May 31st, rather than the earlier date of February 29th. If filing the forms electronically, employers have until June 30th to submit these forms.
For Large Employers
Large employers are required to provide form 1095-C to all employees for tax return purposes. The deadline for this was previously February 1st but has now been extended to March 31st. Employees who submit their tax returns before receiving these forms will not be required to amend their tax return.
Large employers are also required to submit form 1094-C to the IRS by May 31st, or by June 30th if submitting them electronically.
As the IRS has extended these deadlines, requests for additional extensions will not be granted. Employers that fail to meet these deadlines may be subject to non-conformance penalties. If employees know they can’t meet these deadlines, they are encouraged to comply, and the IRS may take this into account when determining whether to abate penalties for reasonable cause.