IRS Extends Some Relief on ACA Reporting

We are still waiting on final ACA reporting forms and instructions.  So on Friday, October 2, the IRS issued Notice 2020-76 providing the following relief with regard to ACA reporting:

  • Entities are once again being held to a “good faith” reporting standard, but the IRS has indicated this will be the final year
    • This means if it is later discovered an entity had incorrect or missing data, then penalties for inaccurate or incomplete reporting may not be assessable if the entity can demonstrate it acted in good faith to provide complete, accurate reporting (penalties may still be assessable, however, for late reporting or an inability to demonstrate good-faith compliance efforts)
    • After this reporting season, it appears the IRS feels six years of reporting is long enough for all employers, insurers, and tech/payroll/HRIS reporting systems to provide accurate information
  • Form 1095-B (provided by insurance companies for insured plans, or by self-funded plan sponsors that are not applicable large employer members) does not have to be automatically mailed to individuals so long as two requirements are met:
    • The entity posts a notice prominently on its website stating how to request the 1095-B with an email address, physical address, and telephone number to submit such a request, and
    • Actually provides the 1095-B within 30 days of someone’s request (note e-delivery is possible only with affirmative individual consent)
  • The usual January 31 deadline for applicable large employer members (ALEs) to provide 1095-C statements for 2020 to individuals is automatically extended 30 days to Tuesday, March 2, 2021 (but ALEs are encouraged to provide statements as quickly as practicable)
  • This does not, however, extend the usual deadlines for submitting reports to the IRS, so the deadlines for submitting 1094-B/1095-B and/or 1094-C/1095-C forms to the IRS are as follows:
    • Monday, March 1, 2021, to postmark paper returns to the IRS (since February 28 falls on a Sunday)
    • Wednesday, March 31, 2021, to electronically file returns to the IRS (e-filing is required if issuing 250+ forms)

The IRS is requesting public comments on whether (and how) the reporting of enrollment information should change (this would be 1094-B/1095-B reporting, as well as Part III of the 1095-C for ALEs), and on whether extensions to furnish statements to individuals will be needed in future years.  You can submit comments electronically here until Monday, February 1, 2021.

IMA will continue to monitor regulator guidance and offer meaningful, practical, timely information.

This material should not be considered as a substitute for legal, tax and/or actuarial advice. Contact the appropriate professional counsel for such matters. These materials are not exhaustive and are subject to possible changes in applicable laws, rules, and regulations and their interpretations.