Late Or Incorrect Forms 1095-C: The IRS Provides Relief, But Only For Employers Acting In Good Faith To Comply Or Who Missed The Deadline Due To Reasonable Cause

Many employers struggled to furnish correct Forms 1095-C to employees by the March 31, 2016 deadline.  Section 6721(a)(2) of the Internal Revenue Code provides penalties for failure to furnish Forms 1095-C to individuals by the deadline.  Although the presumptive penalty is $250 for each delinquent or incorrect return, the penalty amount may be reduced if Forms are furnished or corrected within 30 days of the filing deadline.  Correction within 30 days lowers the presumptive penalty to $50 per return.  If a failure to correct is not made within 30 days, but is made by August 1, the presumptive penalty is reduced to $100 per return.  Read More ›

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“A Trap for the Unwary” – Does Your Self-Funded Health Plan Provide Transgender Benefits? It Might Need to Soon.

Assistant Secretary of Labor Phyllis Borzi recently offered informal guidance on the broad scope of nondiscrimination regulations proposed under Section 1557 of the Affordable Care Act. During her remarks at the ABA Labor Section Employee Benefits Committee Meeting in February, Ms. Borzi indicated that the proposed regulations would apply to any health plan that receives federal funds, including a self-funded plan that uses a third party administrator that receives federal funds.  Ms. Borzi characterized the proposed regulations as a “trap for the unwary,” noting that many self-funded plans assume that the nondiscrimination rules will not apply to them.  In light of Ms. Read More ›

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IRS Delivers Belated Christmas Gift – Extends ACA Reporting Deadlines

The IRS delivered a late Christmas gift December 28, 2015 when, in Notice 2016-4, it extended the Affordable Care Act (“ACA”) reporting deadlines.  The new deadlines affect distribution and filing of Forms 1094 and 1095 for calendar year 2015 and are provided below.

Section 6055
Health Coverage Reporting
Old Filing Deadline New Filing Deadline
Form 1095-B (to employees) February 1, 2016* March 31, 2016
Form 1094-B (to IRS) February 29, 2016 (paper filing)
March 31, 2016 (electronic filing)
May 31, 2016 (paper filing)
June 30, 2016 (electronic filing)
Section 6056
Employer-Provided Health Insurance Offer and Coverage Reporting
Old Filing Deadline New Filing Deadline
Form 1095-C (to employees) February 1, 2016* March 31, 2016
Form 1094-C (to IRS) February 29, 2016 (paper filing)
March 31, 2016 (electronic filing)
May 31, 2016 (paper filing)
June 30, 2016 (electronic filing)

In light of this transitional relief, the IRS will not accept automatic or permissive extensions for filing Forms 1094 and 1095. Read More ›

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Final Forms and Instructions for ACA Information Reporting Released

The IRS recently released the final forms and instructions for information reporting under the Affordable Care Act (“ACA”).  The final forms and instructions will be used for reporting in 2016 concerning 2015 coverage.  The final forms and instructions can be accessed below.

Form 1094-B

Form 1095-B

Instructions for Forms 1094-B and 1095-B

Form 1094-C

Form 1095-C

Instructions for Forms 1094-C and 1095-C

The final forms do not contain any significant changes from the prior draft versions.  Both sets of final instructions also remain largely unchanged, but they contain a few important modifications with respect to reporting specific types of coverage.  For example, the final instructions modified the rules for reporting multiemployer plan coverage, COBRA coverage, and HRA coverage. Read More ›

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New Draft Instructions Released for ACA Information Reporting

As explained in my previous blog, Code Sections 6055 and 6056, added by the Affordable Care Act (“ACA”), require all employers (even small employers) sponsoring self-funded health plans and large employers to file information returns with the IRS and furnish statements to employees concerning the health coverage offered or provided to these employees and their dependents.  Mandatory reporting begins in 2016 with respect to 2015 coverage. Reporting 2014 coverage in 2015 was voluntary.

On August 6, 2015, the IRS released the 2015 draft instructions for mandatory reporting. The 2015 draft instructions contain several changes from the 2014 instructions for voluntary reporting. Read More ›

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ACA Information Reporting Penalties Have Been Increased

Code Sections 6055 and 6056 require large employers and all employers (even small employers) sponsoring self-funded health plans to file information returns with the IRS and furnish statements to applicable employees concerning the health coverage offered or provided to these employees and their dependents.  This information reporting begins in 2016 with respect to 2015 coverage.  It will be similar to Form W-2 reporting.

The Trade Preferences Extension Act of 2015 (the “TPEA”), enacted on June 29, 2015, increased the penalties for failing to comply with these new reporting requirements.  Before the TPEA, penalties were $100 per failure with an annual maximum of $1.5 million.  Read More ›

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King v. Burwell – Supreme Court Confirms Tax Subsidies are Available in All States

In an earlier blog post this year, I discussed the King v. Burwell case and the possible ramifications if the United States Supreme Court did not uphold the Internal Revenue Service position that residents in states with either a state or federal Health Care Exchange are entitled to receive subsidies from the federal government to help pay for Health Care Exchange coverage.  On June 25, 2015, in a 6-3 decision, the Supreme Court ruled that the federal subsidies are available in states with federal Health Care Exchanges as well as states with state Health Care Exchanges.

The Court did not rubberstamp the IRS’ position, but rather found that it was “the Court’s task to determine the correct reading of” the statute.  Read More ›

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May Companies Reduce Employee Hours to Avoid ACA Requirements?

The Affordable Care Act (the “ACA”) generally requires that large employers offer health coverage that meets certain requirements to their full-time employees (i.e., employees working 30 hours or more per week) and their children to avoid paying potential tax penalties.  Some employers have decided to reduce certain employees’ hours to less than 30 hours per week, rendering these employees ineligible for health coverage under the terms of an applicable group health plan while insulating the employer from any ACA tax liability with respect to these employees.

A class action suit filed in May against Dave & Buster’s Inc. (“D&B”) contends that this conduct violates ERISA Section 510 and requires D&B to reinstate coverage for those employees who were reduced to part-time status.  Read More ›

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IRS Issues More Guidance On Employers That Pay For Individual Health Insurance Policies for Employees – Gives Limited Relief to Small Employers

I have blogged more on the topic of how the Health Care Reform Act applies to employers that reimburse employers for individual health insurance policies than any other topic in the last year.  At one point in time, as indicated in my post of June 11, 2014, The IRS Meant What It Said in Notice 2013-54 – Employers Who Pay For Individual Health Insurance Policies for Employees On a Pre-Tax Basis Face Massive Penalties, it looked like such arrangements might be permissible if done on an after-tax basis.  However, as noted in my post of November 13, 2014, Agencies Come Down Hard on Various Employer Health Plans and Arrangements, the IRS clarified that was not the case in a series of FAQs it issued that same month. Read More ›

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IRS Forms and Instructions Finalized for Reporting Health Coverage

On February 8, 2015, the IRS released final forms and instructions for reporting health coverage pursuant to Code Sections 6055 and 6056, which were added by the Health Care Reform Act.  Please see our SW Benefits Update, “Final IRS Forms and Instructions for Reporting Health Coverage Clarify Large Employer Requirements for 2015 and Beyond” for more information on this reporting and the noteworthy revisions to the instructions.  The forms and instructions can be found here, and in the SW Benefits Update. Read More ›

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