Hausmann Group October 25, 2016 10 min read

Legislative Brief: Final Forms for ACA Reporting Released

 

The Internal Revenue Service (IRS) has released final 2016 forms for reporting under Internal Revenue Code (Code) Sections 6055 and 6056.

Forms 1094-B and 1095-B are used by entities reporting under Section 6055, including self-insured plan sponsors that are not applicable large employers (ALEs). Final 2016 versions of these forms and final instructions were released on Sept. 26, 2016.

Forms 1094-C and 1095-C are used by ALEs to report under Section 6056, as well as for combined Section 6055 and 6056 reporting by ALEs who sponsor self-insured plans. Final 2016 versions of these forms and final instructions were released on Sept. 30, 2016.

Minor changes were made to the forms, including the addition of two new “Offer of Coverage” codes for use on Form 1095-C.  The instructions also included some clarifications.

Action Items

Employers should become familiar with the revisions to the forms. These final forms and instructions can be used for filing with the IRS in early 2017, for coverage in 2016.

Background

The Affordable Care Act (ACA) created new reporting requirements under Code Sections 6055 and 6056. Under these rules, certain employers must provide information to the IRS about the health plan coverage they offer (or do not offer) or provide to their employees. Each reporting entity must annually file all of the following with the IRS:

A separate statement (Form 1095-B or Form 1095-C) for each individual who is provided with minimum essential coverage (for providers reporting under Section 6055), or for each full-time employee (for ALEs reporting under Section 6056); and

A transmittal form (Form 1094-B or Form 1094-C) for all of the returns filed for a given calendar year.

Entities must also furnish related statements (Forms 1095-B or 1095-C, or a substitute form) to individuals.

Forms must be filed with the IRS no later than February 28 (March 31, if filed electronically) of the year following the calendar year to which the return relates. For calendar year 2016, forms are required to be filed with the IRS by Feb. 28, 2017 (or March 31, 2017, if filing electronically). The individual statements are due on or before January 31 of the year immediately following the calendar year to which the statements relate. Individual statements for the 2016 calendar year must be furnished by Jan. 31, 2017.

Key Changes

The 2016 forms and instructions are largely unchanged from 2015 versions. Most of the changes were made to provide additional clarification, rather than make substantive revisions. However, note the following items:

Waivers from Electronic Filing. The 2016 instructions state that reporting entities are encouraged to file Form 8508 requesting a waiver at least 45 days before the due date of the return, but no later than the return’s due date. The instructions also note that the IRS does not process waiver requests until January 1 of the calendar year that the returns are due. The 2015 instructions had indicated that waiver requests had to be filed at least 45 days before the due date of the returns.

Reporting Penalties. The 2016 instructions include adjusted penalty amounts for failures to file returns and furnish statements. The adjusted penalty amount is $260 per violation, with an annual maximum of $3,193,000.00 Penalty amounts can be increased or decreased, depending on the situation. Lower annual maximums continue to apply for small businesses.

Taxpayer Identification Number (TIN). Both Form 1095-B and Form 1095-C clarified that employers may report a Taxpayer Identification Number (TIN) instead of a Social Security number (SSN) for any covered individuals (except for employees listed in Part I of Form 1095-C).

Additional Resources

The 2015 versions of these forms are also available on the IRS website:

Form 1094-B and Form 1095-B (and related instructions); and

Form 1094-C and Form 1095-C (and related instructions).

These forms must have been furnished to individuals no later than March 31, 2016. Reporting entities must have filed these forms with the IRS no later than May 31, 2016 (or June 30, 2016, if filing electronically). The IRS announced that information returns under Sections 6055 and 6056 may continue to be filed after the filing deadline (both on paper and electronically). Employers that missed the June 30, 2016, deadline should continue to make efforts to file their returns as soon as possible.

The IRS will not assess penalties for late filing on reporting entities that have made legitimate efforts to file information returns, if they continue to make efforts and complete the process as soon as possible. In addition, penalties may be waived in some cases, for reasonable cause.

The IRS also previously released:

Q&As on Section 6055 and Q&As on Section 6056; and

A separate set of Q&As on Employer Reporting using Form 1094-C and Form 1095-C.

More Information

Please contact your trusted advisors at Hausmann-Johnson Insurance for more information on reporting under Code Sections 6055 and 6056.

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