ACA Employer Deadline IRS Extension

December 5th, 2018 by Thomas Harte

IMPORTANT:  Through IRS Notice 2018-94, the Internal Revenue Service (“IRS”) has extended the due date for the furnishing of forms 1095-B and 1095-C to individuals from January 31^st, 2019 to March 4^th, 2019.

This extension is automatic, and, as a result, the IRS will not formally respond to any pending extension requests for furnishing the forms to individuals. In addition, filers do not need to submit a request or documentation to take advantage of this extension. Despite the extension, the IRS is encouraging employers and other coverage providers to furnish the 2018 statements as soon as they are able.

Forms 1095-B are used to report whether individuals have (“enrolled”) minimum essential coverage (“MEC”) and, therefore, are not liable for the individual shared responsibility payment. Forms 1095-C are used to report information about “offers” of health coverage and enrollment in health coverage for employees, to determine whether an employer owes an employer shared responsibility payment, and to determine the eligibility of employees for the premium tax credit.

Under the Affordable Care Act’s (“ACA’s”) employer mandate, applicable large employers (“ALEs”) (those employing on average at least 50 full-time employees and full-time equivalents in the prior calendar year), are required to offer MEC to at least 95% of their full-time employees (and their dependents) that is “affordable” and provides “minimum value” to avoid applicable penalties.

Notice 2018-94 does not extend the due date for filing the Forms 1094-B, 1095-B, 1094-C and 1095-C to the IRS, with the due date remaining February 28, 2019, if not filing electronically, or April 1, 2019, if filing electronically. Employers may still obtain an automatic 30-day extension to file the required forms by filing a Form 8809 with the IRS on or before the forms’ due date. An employer may also receive an additional 30-day extension under certain hardship conditions.

Employers who fail to comply with the extended due dates for furnishing Forms 1095-B and 1095-C to individuals or for filing the Forms 1094-B, 1095-B, 1094-C and 1095-C are subject to penalties. However, an employer that fails to meet the relevant due dates should still furnish and file the required forms as soon as possible. The IRS will take such furnishing and filing of the forms into determining whether to decrease penalties for reasonable cause.

Applicable Large Employers (ALEs) who fail to offer affordable and minimum value to substantially all full time employees may be subject to one of two tax penalties if at least one FT employee purchases health coverage through the Health Insurance Exchange Marketplace and receives a premium tax credit to subsidize their premium payments.

1. The no offer penalty – If an employer fails to offer health coverage to substantially all FT employees, and at least one FT employee receives a premium tax credit to purchase coverage from the Health Insurance Exchange Marketplace, the employer is subject to the following financial tax penalty in 2018:  $2,320 multiplied by the organization’s total number of FT employees, minus the first 30.
2. The inadequate coverage penalty – If an employer offers health coverage to substantially all FT employees, but the coverage fails to meet the affordable and minimum value provisions, and at least one full time employee purchases coverage through the Health Insurance Exchange Marketplace and receives a premium tax credit, the employer is subject to the following financial tax penalty:  The employer must pay the lesser of $3,480 per subsidized FT employee or the employer must pay $2,320 per FT employee, minus the first 30.

For more information regarding the Affordable Care Act (ACA), compliance, or regulatory matters; please contact the experts at Landmark Benefits, Inc.