On Monday, December 28, 2015, the Internal Revenue Service announced in Notice 2016-4 that employers will have additional time to file annual reports required under the Patient Protection and Affordable Care Act ("ACA"). The ACA requires certain employers to report minimum essential coverage annually on Forms 1094 and 1095. These forms were originally due to employees on February 1, 2016 and employers had until March 31, 2016 to file the forms electronically with the IRS (February 29, 2016 for non-electronic filers). However, Notice 2016-4 extends both of those deadlines for all employers required to file Forms 1094 and 1095.
The new deadlines are as follows:
- New Deadline for Forms 1095-B and 1095-C to Individuals: March 31, 2016.
- New Deadline for Forms 1094 and 1095 to the IRS: June 30, 2016 for electronic filers and May 31, 2016 for non-electronic filers.
The IRS indicated that it had determined that providers needed "additional time to adapt and implement systems to gather, analyze and report this information."
Employers should note that the penalties for failure to timely file (and failure to timely furnish) Forms 1095-C were increased earlier this year, from $100 per failure to $250 per failure. There are a number of exceptions and modifications that can reduce the penalties in certain circumstances, and can increase the penalties in other circumstances, but extending the deadlines so that employers have sufficient time to satisfy their obligations is the most effective penalty relief.
This delay comes among other recent IRS delays and extensions. For example, the IRS increased the transit benefit exclusion available to commuters (see our Alert dated December 23, 2015). And, evidently following the IRS's lead, Congress voted to delay the implementation of the so-called "Cadillac Tax" by two years. The Cadillac Tax was set to begin in 2018, but, in a rare bipartisan effort, Congress voted to delay the Tax until 2020.
Congress also voted to repeal legislation passed in July 2015 that extended the maximum extension for Form 5500 filings from 2½ months to 3½ months. After several federal agencies expressed concern over the 3½ month extension, Congress reset the maximum filing deadline back to 9 ½ months after the close of the plan year.
Bottom Line
While the news will likely be a welcomed delay, employers should not delay in preparing their 2015 forms. To ensure timely compliance, employers should become familiar with these forms, ensure they can obtain access to the information necessary to complete these forms, identify any venders that will be used, and enter into agreements with those venders to ensure timely and proper reporting.
If you have any questions regarding this Alert, or the changes described, please feel free to contact the authors of this Alert, Tiffany Downs, tdowns@fordharrison.com, Jeffrey Ashendorf, jashendorf@fordharrison.com, Scott Wagner, swagner@fordharrison.com, Kate Winslow, kwinslow@fordharrison.com, or any member of FordHarrison's Employee Benefits Practice Group. You may also contact the FordHarrison attorney with whom you usually work.