Similar to last year, in Notice 2020-76, the Internal Revenue Service (the “IRS”) has extended the deadlines for delivery (but not filing) of the 2020 Forms 1094 and 1095 required by the Affordable Care Act (the “ACA”).
ACA Information Reporting
All employers who qualify as applicable large employers (“ALEs”), and all insurers and self-insured employers, are required to provide certain information statements to individuals and file certain reports with the IRS in compliance with the ACA. For the 2020 reporting year, the deadlines by which forms must be provided to individuals has been extended, but the dates for IRS filings by employers and insurers have not been extended, as follows:
^ Because the normal deadline falls on a Sunday, it moved to Monday.
* Electronic filing is mandatory through the IRS’ ACA Information Returns (AIR) Program if you are filing 250 or more Forms 1095-C in 2021.
Relief From Penalties
The tax on individuals who do not have ACA-compliant health coverage continues to be zero for 2020. Therefore, an individual does not need Form 1095-B or Form 1095-C to be able to complete his or her 2020 tax return. As a result, the IRS has announced that fully-insured employers will not owe a penalty for failure to furnish the 2020 Form 1095-B to employees if:
- The employer posts a notice “prominently” on its website. The notice must state that individuals may receive a copy of their Form 1095-B upon request. The notice must provide an address (email and physical) and telephone number for contacting the employer to make the request.
- The employer must furnish the 2020 Form 1095-B to an employee requesting it within 30 days of the date of the request.
There is no relief from penalties for employers with self-insured plans that must furnish Form 1095-C to full-time employees. While the above-described relief is available to self-insured employers for failure to furnish a 2020 Form 1095-C to part-time or other non-full-time employees, self-insured employers must still comply with the extended March 2, 2021 mailing deadline with respect to all of their full-time employees.
All employers, whether fully-insured or self-insured, must still file copies of the 2020 Forms 1095-B and 1095-C, along with the applicable Form 1094-B or 1094-C Transmittal Form, with the IRS. Thus, although employers may avoid the need to mail some forms to employees, they will still have to make sure that all forms are timely prepared so that they can timely respond to employee requests and make their IRS filings.
Relief from penalties has again been extended to employers that can show good faith efforts to comply with the information-reporting requirements if the information reported is missing or inaccurate. Reporting, even with errors, is still a better approach than failing to report, which does not have relief from penalties (except as described above for the Form 1095-B). This “good faith” relief was intended to be transitional relief only. The IRS has indicated that it “intends” 2021 to be the last year the relief is available. This leaves the door open for the IRS to again extend this relief into 2022, but you should expect that that this relief will sunset in 2021.