IRS Permanently Extends Deadline for Distributing ACA Forms

Despite having done so in 2018, 2019, and 2020, last year, the IRS warned employers with more than 50 full-time employees (Applicable Large Employers or ALEs)?not?to anticipate extensions to the Jan 31st deadline to furnish employees with Affordable Care Act (ACA) reporting forms. However, things have changed, as the Inland Revenue Service (IRS) has issued a proposed rule change,?86 FR 68939, which again provides a month-long extension.

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As in prior years, under the proposed revision, applicable employers will have an additional 30 days to provide statements to their employees regarding their employer-sponsored health insurance. These reports, known as 1095s, inform employees whether this insurance is compliant with ACA requirements for minimum essential coverage.

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This rule change is intended to become a permanent amendment, although the public consultation period runs until February 4, 2022.

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The new, extended deadline to supply forms 1095B or 1095C is?March 2, 2022. Although the ruling is not entirely finalized, the IRS has stated that approval notwithstanding, employers may take advantage of this extension to obtain more time to complete these mandatory reporting requirements.

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It’s important to note that these changes do not affect the statutory IRS filing dates, as outlined below:

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Deadline ???????????????????????????????????????????????????????????????????ACA Requirement

March 2, 2022, ??????????????????????????????????????????????????????????Provision of 1095 forms

(Automatic extension from January 31, 2022)???

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February 28, 2022, ????????????????????????????????????????????????????IRS Paper Filing Deadline

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March 31, 2022, ????????????????????????????????????????????????????????IRS Electronic Filing Deadline*

*Note that all employers with over 250 returns to file must do so electronically.

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It is possible to obtain a filing extension of up to 30 days in extenuating circumstances by completing form 8809 – Application for Extension of Time to File Information Returns by the above deadlines.

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What Forms Should Employers Issue?

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Here are the revised ACA forms for 2021 insurance coverage reporting:

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Transmittal Forms:

1094-B—to file Form 1095-B to the IRS.

1094-C—to file Form 1095-C to the IRS.

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Reporting Forms:

1095-B: intended for both insurance companies providing full coverage via employer-sponsored plans and self-funded employers to list eligible employees and family members allocated minimum essential coverage under each policy.

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Employers extending their coverage to non-employees enrolled in coverage should use the 1095-B form to report coverage instead of 1095-C Part III.

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1095-C: for ALEs sponsoring self-funded health plans to outline coverage offers, in avoidance of “shared responsibility” penalties. These are completed for and provided to all full-time employees and submitted to the IRS. Self-insured ALEs must also do this for part-time staff enrolled in their coverage.

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When Will This Ruling Be Finalized?

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The Federal Government requests written or electronic comments and requests for a public hearing by February 4, 2022. The proposed change is expected to be a permanent amendment shortly thereafter.

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Keep Employees Informed

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It is advisable to let employees know as soon as possible when they might expect to receive their 1095s. This will help reduce any anxiety employees may have regarding their ongoing healthcare coverage.