IRS Extends Delivery Date Deadline for Forms 1095 B and C And Announces Good Faith Compliance Relief

IRS Extends Delivery Date Deadline for Forms 1095 B and C And Announces Good Faith Compliance Relief

The Internal Revenue Service (IRS) has, through the publication of Notice 2018-06, extended the deadline for applicable large employers (ALEs) and health insurance issuers (including self-funded-health plans) to furnish Forms 1095 B & C to employees and covered individuals.  The new deadline is March 2, 2018, instead of January 31, 2018.  Good-faith compliance transition relief regarding information reporting penalties has been extended for another year too for ALEs and health insurance issuers.

This deadline extension should be welcome news for many employers and self-funded health plans since it provides an extra month to make sure that all Forms 1095-B or C are sent out to applicable employees and covered individuals.  However, employers and self-funded plans need to know that the IRS did not extend the due date for employers and health insurance issuers to submit coverage documentation to the federal government.  Paper copies of Forms 1094 and 1095 B&C are due to the IRS by February 28, 2018, and electronic submissions must be completed by April 2, 2018.  All sized companies may submit their forms to the IRS electronically, but enterprises that issue 250 or more Forms 1095 B and/or C must use the electronic submission process.  Employers should also let employees know that they do not need to wait to receive Forms 1095-B and 1095-C before filing their individual income tax returns, but when they get their 2017 forms, they should keep them with their tax records.

Notice 2018-06 also provides employers and health coverage issuers with a bit of protection in the case of accidental errors when completing 1094 and 1095 forms and transmitting the documents to the IRS.  The notice extends good-faith compliance transition relief for another year, but it does have some limitations.  The transition relief only applies to employers and health plans that accidentally furnish and file incorrect or incomplete information on a statement or return.  It does not shield employers and health insurance issuers who fail to comply with their reporting obligations from penalties.  Employers and issuers who miss the deadline to provide statements to employees and covered individuals or are late to file their returns with the IRS may have penalty liability too.  However, employers and other coverage providers that do not meet the relevant due dates should still furnish statements and file returns with the IRS as soon as possible, since the IRS will consider that when determining whether to abate penalties for reasonable cause. In determining good faith, the IRS will also consider whether an employer or other coverage provider made reasonable efforts to prepare for reporting the required information to the IRS and furnishing it to employees and covered individuals.  Additionally, the IRS will evaluate if the employer or issuer is taking steps to ensure that it will be able to comply with the reporting requirements for 2018.

If you have questions regarding your organization’s reporting requirements, please contact your Kistler Tiffany Benefits’ Employee Benefits Consultant.

By Jessica Waltman, Special Contributor

Jessica Waltman is a health reform strategist, with more than 20 years of experience in health insurance markets and health policy. She is the former Senior Vice President, Government Affairs, for the National Association of Health Underwriters.