IRS Proposes ACA Reporting Relief And Deadline Extensions For Employers

Recently, the IRS issued a proposed regulation that would permanently and automatically allow a 30-day extension for furnishing Affordable Care Act (ACA) reporting forms to individuals - eliminating transitional good-faith relief for inaccurate and incomplete Forms 1094 and 1095.  

These forms clarify that minimum essential coverage (MEC) does not include Medicaid coverage that is limited to COVID-19 testing and diagnostic services provided under the 2020’s Family First Coronavirus Response Act (FFCRA). While these regulations would apply and be effective at the beginning of 2022, entities should rely on the current regulations for 2021 reporting submissions. 

The ACA requires applicable large employers (ALEs) – employers that during the prior year had 50 or more full-time employees or the equivalent when part-time employees’ hours are combined. Deadlines to these forms are as follows: 

The proposed regulation includes the following aspects:  

1. A permanent and automatic extension of time for providing statements to individuals to no more than 30 days after January 31st, or the next business day if this day falls on a weekend or a holiday. Note, however, the proposed regulation has not changed the deadline for filing with the IRS (February 28th if on paper and March 31st if electronically). 
2. The IRS will no longer accommodate employers filing incomplete or inaccurate information on Forms 1094 and 1095 (as previously permitted under Notice 2020-76). 
3. As long as the ACA individual mandate (otherwise known as “shared responsibility”) penalty remains zero, a small, self-insured employer may simply post a clear and conspicuous notice on the entity's website stating that responsible individuals may receive a copy of their Form 1095-B upon request, an alternative from mailing out individual forms to each enrolled individual.  

Of particular note, five states (California, Massachusetts, New Jersey, Rhode Island, and Vermont – along with Washington D.C.) have enacted individual health coverage mandates that mirror the former federal requirement that individuals obtain ACA-compliant health coverage or pay a penalty tax. These states could require taxpayers to show proof of coverage or face fines.  

GMS is devoted to helping businesses stay up to date on deadlines and regulations. If you are looking to spend more time focusing on the core of your business and minimize your administrative burden, contact us today.