The Affordable Care Act (“ACA”) imposed additional reporting requirements on health insurers (including, for this purpose, self-funded employer plans) and “applicable large employers” (those with 50 or more full-time employees). Starting with the first year to which the reporting requirements applied (2015), the IRS has granted insurers and employers additional time to issue the appropriate ACA-reporting forms (Form 1095-B for insurers and Form 1095-C for employers). In Notice 2019-63, the IRS has again extended this reporting deadline for 2019. The Notice also extends the “good-faith compliance” standard and offers a special reporting option in response to the repeal of the penalty for failing to comply with the ACA’s individual coverage mandate.

Deadlines for Issuing Forms to Individuals and Filing with IRS

Rather than January 31, 2020, Forms 1095-B and 1095-C must now be provided to insureds or employees by March 2, 2020. Due to this automatic 30-day extension, the IRS will not even consider 30-day extension requests under the usual “good cause shown” standard.

As in recent years, the IRS has not extended the deadline for insurers and employers to transmit these ACA-reporting forms to the IRS – using either Form 1094-B (for insurers) or 1094-C (for employers). So insurers will still need to file their Forms 1094-B with the IRS by March 31, 2020, and employers will still need to file their Forms 1094-C by either February 28, 2020 (if done on paper), or March 31, 2020 (if done electronically). However, the IRS notes that the option of requesting a 30-day extension of time to make these IRS filings will remain available, by filing a Form 8809.

Extension of “Good-Faith Compliance” Standard

Moreover, the IRS has again extended the “good-faith compliance” standard. Insurers and employers that can show good-faith efforts to comply with these ACA-reporting requirements may avoid the substantial penalties that would otherwise apply. As in earlier years, however, this relief does not apply to missing or late filings. So insurers and employers should continue to work toward meeting these filing deadlines.

Relief Attributable to Repeal of Individual Mandate

As described below, there is one respect in which the relief granted in Notice 2019-63 goes beyond that granted in earlier years. This stems from the fact that Congress reduced to zero the penalty for failing to comply with the ACA’s individual coverage mandate during 2019 and later years. Because an insurer’s Form 1095-B is intended solely to help the IRS administer this individual mandate, the additional relief is primarily directed to insurers. However, the additional relief may also apply in a very limited respect to a self-funded employer’s Form 1095-C reporting.

Notice 2019-63 provides that the IRS will not assess a penalty against an insurer for failing to issue a Form 1095-B if both of the following conditions are satisfied:

  1. The insurer posts a notice prominently on its website stating that covered individuals may receive a copy of their Form 1095-B upon request, along with an e-mail address and a physical address to which such requests may be sent and a telephone number to call with any questions; and
  2. Within 30 days of receiving such a request, the insurer furnishes a Form 1095-B.

An employer with a self-funded health plan may also use Form 1095-B to report the coverage provided to its employees. If so, this same relief would apply to those employers. However, many such employers choose to report their self-funded health coverage in Part III of Form 1095-C. A Form 1095-C must be issued to each employee who met the ACA’s “full-time” definition during any month of the year, but employers that cover part-time employees may choose to report this coverage in Part III of Form 1095-C.

Those employers – i.e., self-funded employers that cover part-time employees – might also benefit from this additional relief. As with insurers, such an employer would have to both:

  1. Post a notice prominently on its website stating that part-time employees who had coverage may receive a copy of their Form 1095-B (or Part III of Form 1095-C) upon request, along with an e-mail address and a physical address to which such requests may be sent and a telephone number to call with any questions; and
  2. Within 30 days of receiving such a request, furnish a Form 1095-B (or Part III of Form 1095-C).

Such an employer would still need to issue a Form 1095-C to any employee who was full-time during any month of the year, with Part III completed to report any coverage that employee received. The Notice warns that reporting penalties will continue to be assessed against employers that fail to comply with this requirement.

As a practical matter, this relief may lead insurers to suspend all of their affirmative ACA reporting. However, large employers may find it easier to provide Forms 1095-C to their covered part-time employees at the same time that they are issued to their full-time employees – as opposed to generating these forms at a later date (upon a part-time employee’s request). Employers may want to work with their ACA-reporting vendors to resolve this question.