On November 24, 2021, the IRS published a notice of proposed rulemaking with requests for public comments.  The proposals are as follows:

  • Permanently provide an automatic extension of 30 days for all 1095-B and 1095-C forms to be provided to individuals
    • These forms are ordinarily due when W-2 forms are due to individuals, by January 31 each year
    • This proposal would permanently offer an automatic extension of 30 days each year
    • Note this does not adjust the deadlines for submitting forms to the IRS…for paper filers, that would remain February 28 each year (March 31 for electronic filers)
  • Permanently allow 1095-B forms (and 1095-C forms given to individuals who were not full-time at any point in the year but were enrolled in the ALE’s self-funded health plan) to only be mailed upon request during all years in which the individual shared responsibility payment amount is zero
    • The insurer or employer would have to disclaim on their public website that the forms are available upon request and then provide a requested form within 30 days
    • The “clear and conspicuous” website disclaimer “must include an email address, a physical address to which a request may be sent, and a telephone number” the individual may contact with questions and must remain on the website until October 15
    • Note applicable large employers still must actively provide the 1095-C to anyone who was full-time at any point in the year…this relief does not apply for them
  • Permanently eliminate transitional good faith relief
    • The IRS had warned in Notice 20-76 their intent to no longer offer penalty relief for employers demonstrating good faith efforts to provide complete and accurate reporting
    • So going forward starting with 2021 forms due in early 2022, employers submitting incorrect information or missing anyone in their reporting will be subject to potential ACA reporting penalties under §§ 6721 and 6722
      • Note there may be separate penalties for statements provided to individuals vs. reporting provided to the IRS, so penalties are often double
      • Also note applicable large employers (ALEs) may also find errors impacting their employer shared responsibility payment amounts under §4980H

The IRS encourages stakeholders to provide public comment within 60 days of publication in the federal register on the issues above and on some 2016 proposals which they only received 16 comments on.

Employers have been waiting for final ACA reporting forms and instructions.  While final forms are ready, final instructions are not yet ready as of November 30, 2021update: finally provided Friday, December 10, 2021.  No substantial changes from last year that we can see, other than losing good faith reporting relief.

  • Final 2021 forms 1094-B and 1095-B due early 2022 are ready (final instructions are here)
  • Final 2021 forms 1094-C and 1095-C due early 2022 are ready (final instructions are here)

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.