IRS Extends Health Care Information Reporting Due Dates

Author: Alice Gilman

December 30, 2015

On December 29, 2015, the IRS issued Notice 2016-4, which extends the time an employer has to provide employees with Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, or Form 1095-B, Health Coverage. The deadline for filing the forms with the IRS has been extended, as well. These extensions apply only to 2015 forms that are filed in 2016. Next year is the first year that an employer is required to report offers of health coverage to employees and the IRS.

Extension Responds to Stakeholder Feedback

The IRS is prepared to begin accepting these forms in January, and employers are encouraged to begin reporting to employees and other individuals (e.g., retirees) as soon as possible. While the regular due dates are coordinated with the due dates for the W-2, Wage and Tax Statement, series of forms in response to feedback from employers and others, including insurers, this limited extension will provide employers and insurers with more time to meet their 2015 reporting requirements.

In view of these extensions, the IRS will not approve any Form 8809, Application for Extension of Time to File Information Returns, which an employer filed prior to December 29, 2015. The new due dates are as follows:

• An employer must provide an employee or other individual with his or her copy of Form 1095-C or Form 1095-B by March 31, 2016, instead of February 1, 2016;
• An employer filing Form 1095-C or Form 1095-B on paper must file those forms, along with the appropriate transmittal - Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns, or Form 1094-B, Transmittal of Health Coverage Information Returns, by May 31, 2016, instead of February 29, 2016;
• An employer filing Forms 1095-C or 1095-B electronically must file those forms by June 30, 2016, instead of March 31, 2016.

An employer that does not comply with these extended due dates will be liable for penalties for failing to timely furnish an employee or other individual with his or her copy of Form 1095-C or Form 1095-B and to file those forms with the IRS. However, an employer that does not meet these extended due dates is still encouraged to comply with its information reporting responsibilities. The IRS will take into consideration all of an employer's actions when determining whether the employer is eligible to have penalties abated for reasonable cause.

The IRS will also consider whether an employer made reasonable efforts to prepare for reporting the required information and furnishing the information to an employee and other individuals. Such reasonable efforts include gathering and transmitting the necessary data to an agent or testing its ability to transmit information to the IRS. In addition, the IRS will take into account the extent to which the employer is taking steps to ensure that it is able to comply with the reporting requirements for 2016.

Impact on Employees

According to the IRS, the vast majority of employees will not be affected by these extensions. Similar to the filing of the 2014 Form 1040, U.S. Individual Income Tax Return, an employee will check a box on his or her 2015 Form 1040 indicating that he or she had health coverage for the entire year.

However, an employee who is affected may rely on other information received from his or her employer about an offer of health coverage for purposes of determining his or her eligibility for the premium tax credit. He or she will not need to file an amended Form 1040 once the employer furnishes Forms 1095-C. The form should be retained with the employee's tax records.

Similarly, an employee who receives an offer of self-insured coverage from an employer may rely on other information to confirm that he or she had minimum essential coverage during 2015. The employee need not file an amended Form 1040 once he or she receives his or her Form 1095-B. The form should be retained with the employee's tax records.