IRS Extends Deadlines to Furnish Health Coverage Information to Individuals

(Parker Tax Publishing December 2016)

The IRS has extended the deadline for providers of minimum essential coverage and applicable large employers to furnish to individual taxpayers Form 1095-B, Health Coverage and Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, reporting health coverage for the 2016 tax year. The deadline has been extended from January 31, 2017, to March 2, 2017. This extension does not apply to forms required to be filed with the IRS. Notice 2016-70.

Affordable Care Act Information Reporting Requirements

Under Code Sec. 6055 and the related regulations, every person that provides minimum essential coverage to an individual during a calendar year must file with the IRS an information return and must furnish to the responsible individual identified on the return a written statement reporting the coverage. Form 1094-B, Transmittal of Health Coverage Information Returns, and Form 1095-B, Health Coverage, are used for purposes of Code Sec. 6055.

Under Code Sec. 6056 and the related regulations, applicable large employers (ALE) subject to the employer shared responsibility provisions sponsoring self-insured group health plans are required to report information about the coverage to the IRS and to full-time employees to which the coverage relates on Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, and Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns.

Providers of minimum essential coverage and ALEs generally must file the information returns with the IRS on or before February 28 (March 31 if filed electronically) and must furnish the written statement to the responsible individual or full-time employee identified on the return on or before January 31. Failure to file or furnish these forms may subject the provider or ALE to penalties under Code Secs. 6721 and 6722.

Due Dates Extended for Furnishing 2016 Information Returns to Taxpayers

According to the IRS, a substantial number of employers, insurers, and other providers of minimum essential coverage need additional time beyond the January 31, 2017, due date to gather and analyze the information and prepare the 2016 Forms 1095-B and 1095-C to be furnished to individuals. Accordingly, Notice 2016-70 extends by 30 days the due date for furnishing the 2016 Form 1095-B and the 2016 Form 1095-C, from January 31, 2017, to March 2, 2017. The automatic extension provisions under Reg. Sec. 1.6055-1(g)(4) and Reg. Sec. 301.6056-1(g)(1) do not apply to these extended dates.

The IRS stated that no similar need for additional time for employers, insurers, and other providers of minimum essential coverage to file with the IRS the 2016 Forms 1094-B, 1095-B, 1094-C, and 1095-C. Therefore, Notice 2016-70 does not extend the due date for filing with the IRS the 2016 Forms 1094-B, 1095-B, 1094-C, or 1095-C, which remains February 28, 2017, if not filing electronically, or March 31, 2017, if filing electronically. Notice 2016-70 does not affect the provisions regarding automatic extensions of time for filing these returns, which is done by submitting a Form 8809, Application for Extension of Time To File Information Returns.

In addition, Notice 2016-70 provides transition relief from penalties under Code Secs. 6721 and 6722 for incorrect or incomplete information reported on the return or statement, provided reporting entities that can show that they have made good-faith efforts to comply with the information-reporting requirements under Code Sec. 6055 and 6056 for 2016 (both for furnishing to individuals and for filing with the IRS). This relief applies to missing and inaccurate taxpayer identification numbers and dates of birth, as well as other information required on the return or statement.

Observation: The information reporting penalties under Code Secs. 6721 and 6722 are $250 per Form 1094-B, Form 1094-C, Form 1095-B, or Form 1095-C with respect to which a failure occurs. The maximum penalty that may be imposed is $3,000,000.

In determining good faith, the IRS takes into account whether an employer or other coverage provider made reasonable efforts to prepare the required information for reporting to the IRS and furnishing it to employees and covered individuals, such as gathering and transmitting the necessary data to an agent to prepare the data for submission to the IRS, or testing its ability to transmit information to the IRS.

For a discussion of the information reporting requirements under the ACA for applicable large employers, see Parker Tax ¶191,160.

Disclaimer: This publication does not, and is not intended to, provide legal, tax or accounting advice, and readers should consult their tax advisors concerning the application of tax laws to their particular situations. This analysis is not tax advice and is not intended or written to be used, and cannot be used, for purposes of avoiding tax penalties that may be imposed on any taxpayer. The information contained herein is general in nature and based on authorities that are subject to change. Parker Tax Publishing guarantees neither the accuracy nor completeness of any information and is not responsible for any errors or omissions, or for results obtained by others as a result of reliance upon such information. Parker Tax Publishing assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect information contained herein.

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