The extended due date — Mar. 31, 2016 — for employers and other providers of minimum essential coverage to furnish 2015 Forms 1095-B or 1095-C to individuals is quickly approaching. Although the minimum essential coverage reporting requirements have been generally slow to take effect, IRS has stated that the Mar. 31, 2016 deadline is not subject to further extension.
Background. Code Sec. 6055(a) generally requires every health insurance issuer, sponsor of a self-insured health plan, government agency that administers government-sponsored health insurance programs, and other entity that provides “minimum essential coverage” (defined in Code Sec. 5000A(f)) to file annual returns reporting information for each individual for whom such coverage is provided. An entity filing an information return reporting minimum essential coverage must also furnish a written statement to each individual listed such a return, that shows the information that must be reported to IRS for that individual. (Code Sec. 6055(c)(1)) The purpose of this reporting is to allow taxpayers to establish, and IRS to verify, that the taxpayers were covered by minimum essential coverage and their months of enrollment during a calendar year.
Reporting entities subject to Code Sec. 6055’s requirements use Form 1094-B, Transmittal of Health Coverage Information Returns, and Form 1095-B, Health Coverage, or another form that IRS designates, to report minimum essential coverage.
Code Sec. 6056 requires annual information reporting by applicable large employers (ALEs) relating to the health insurance that the employer offers (or does not offer) to its full-time employees. In general, an ALE, as defined in Code Sec. 4980H, is an employer that employed an average of at least 50 “full-time employees” during the preceding calendar year. Code Sec. 6056 also requires those employers to furnish related statements to their employees. The information that the employers report allows IRS to administer the Code Sec. 4980H employer shared responsibility provisions and allows their employees to determine whether, for each month of the calendar year, they may claim on their individual tax returns a Code Sec. 36B premium tax credit. Under Code Sec. 36B(c)(2)(C), an employee is not eligible for the premium tax credit for any month for which the employee is eligible for coverage under an eligible employer-sponsored plan that provides minimum value and is affordable (or for any month for which the employee enrolls in an eligible employer-sponsored plan, regardless of whether the plan is affordable or provides minimum value). The information reported also is used by individuals to confirm that they had minimum essential coverage for purposes of the individual mandate under Code Sec. 5000A.
Employers meet the Code Sec. 6056 requirements by filing Form 1094-C, Transmittal of Employer Provided Health Insurance Offer and Coverage Information Returns, and a Form 1095-C, Employer Provided Health Insurance Offer and Coverage, or other form(s) designated by IRS, or a substitute form. Each Form 1095-C and the transmittal Form 1094-C together constitute a Code Sec. 6056 information return required to be filed with IRS. (Reg. § 301.6056-1(c)(1)) Form 1095-C generally includes information on the coverage (if any) offered by the ALE to the full-time employee.
The penalties under Code Sec. 6721 for failing to timely file an information return or filing an incorrect or incomplete information return, and under Code Sec. 6722 for failing to timely furnish an information statement or furnishing an incorrect or incomplete information statement, apply to the information returns and statements required by Code Sec. 6055 and Code Sec. 6056.
Deadline to furnish 2015 Forms 1095-B and 1095-C approaching. In Notice 2016-4, the due date for furnishingthe 2015 Form 1095-B and the 2015 Form 1095-C to individuals was extended from Feb. 1, 2016, to Mar. 31, 2016.
In light of the above extension, IRS stated that the provisions regarding permissible extensions of time for furnishing statements (e.g., a 30-day extension granted by IRS upon showing good cause for same) will not apply, and employers or other coverage providers that don’t meet this deadline are subject to payee statement penalties under Code Sec. 6722. However, employers and other coverage providers that do not meet the extended due dates are still encouraged to furnish and file as soon as they can, which IRS will take into consideration when determining whether to abate penalties for reasonable cause. IRS will also take into account whether an employer or other coverage provider made reasonable efforts to prepare for furnishing the required information to employees and covered individuals, as well as the extent to which the employer or other coverage provider is taking steps to ensure that it is able to comply with the requirements for 2016. (Notice 2016-4)