Deadline to File Extension for Forms 1094-C and 1094-B

  • Self-insured group health plans (large and small groups).

3/1 Deadline only applies to groups that will file the extension Form 8809 non-electronically.

Deadline to file Form 8809 electronically is 3/31.

 

*Form 8809 must be filed on or before the due date of the returns.

IRS.

IRS.

Employers can file Form 8809 to get an automatic 30-day extension of time to file Forms 1094-C or 1094-B.

FIRE Production System, You can file Form 8809 online by completing a fill-in Form 8809 through the FIRE system for an automatic 30-day extension (not available for Form W-2). Acknowledgments are automatically displayed online if the request is made by the due date of the return.

by 6dadmin

Medicare Part D: Disclosure Notice to CMS

Highlights

ANNUAL DISCLOSURE

  • Each year, employers with health plans that provide prescription drug coverage to Medicare-eligible individuals must disclose to CMS whether that coverage is creditable or non-creditable.
  • The annual disclosure must be provided within 60 days after the start of the plan year.

CREDITABLE COVERAGE

  • A group health plan’s prescription drug coverage is considered creditable if it is at least as generous as Medicare Part D prescription drug coverage.
  • There are two permissible methods to determine whether coverage is creditable—a simplified determination method and an actuarial determination method.

Medicare Part D: Disclosure Notice to CMS

Employers with health plans that provide prescription drug coverage to individuals who are eligible for Medicare Part D are subject to certain disclosure requirements. One of these requirements provides that plan sponsors must disclose to the Centers for Medicare and Medicaid Services (CMS) on an annual basis and at other select times, whether the plan’s prescription drug coverage is creditable or non-creditable.

This disclosure is required regardless of whether the health plan’s coverage is primary or secondary to Medicare. Plan sponsors are required to use the online form on the CMS Creditable Coverage Web page to make this disclosure.

The plan sponsor must complete the online disclosure within 60 days after the beginning of the plan year. For calendar year health plans, the deadline for the annual online disclosure is March 1 (Feb. 29 for leap years).

Links and Resources

Employers that are required to report to CMS should work with their advisors to determine whether their prescription drug coverage is creditable or non-creditable.

For more information, employers should also visit CMS’ Creditable Coverage Web page, which includes links to the online disclosure form and related instructions.

DISCLOSURE TO CMS

Group health plan sponsors are required to disclose to CMS whether their prescription drug coverage is creditable or non-creditable. This disclosure is required regardless of whether the health plan’s coverage is primary or secondary to Medicare.

If an employer’s group health plan does not offer prescription drug benefits to any Medicare Part D eligible individuals as of the beginning of the plan year, the group health plan is not required to submit the online disclosure form to CMS for that plan year.

Also, a plan sponsor who has been approved for the retiree drug subsidy is exempt from filing the CMS disclosure notice with respect to those qualified covered retirees for whom the sponsor is claiming the subsidy.

The disclosure must be made to CMS on an annual basis and whenever any change occurs that affects whether the coverage is creditable. More specifically, the Medicare Part D disclosure notice must be provided within the following time frames:

  • Within 60 days after the beginning date of the plan year for which the entity is providing the disclosure to CMS;
  • Within 30 days after the termination of a plan’s prescription drug coverage; and
  • Within 30 days after any change in the plan’s creditable coverage status.

ONLINE DISCLOSURE METHOD

Plan sponsors are required to use the online disclosure form on the CMS Creditable Coverage Web page. This is the sole method for compliance with the disclosure requirement, unless the entity does not have Internet access.

The disclosure form lists the required data fields that must be completed in order to generate the disclosure notice to CMS, such as types of coverage, number of options offered, creditable coverage status, period covered by the disclosure notice, number of Part D-eligible individuals covered, date the creditable coverage disclosure notice is provided to Part D-eligible individuals, and change in creditable coverage status. CMS has also provided instructions for detailed descriptions of these data fields and guidance on how to complete the form.

CREDITABLE COVERAGE

A group health plan’s prescription drug coverage is considered creditable if its actuarial value equals or exceeds the actuarial value of standard Medicare Part D prescription drug coverage. In general, this actuarial determination measures whether the expected amount of paid claims under the group health plan’s prescription drug coverage is at least as much as the expected amount of paid claims under the Medicare Part D prescription drug benefit.

The determination of creditable coverage does not require an attestation by a qualified actuary, except when the plan sponsor is electing the retiree drug subsidy for the group health plan. However, employers may want to consult with an actuary to make sure that their determinations are accurate. For plans that have multiple benefit options (for example, PPO, HDHP and HMO), the creditable coverage test must be applied separately for each benefit option.

There are two permissible methods to determine whether coverage is creditable for purposes of Medicare Part D—a simplified determination method and an actuarial determination method.

Simplified Determination

If a plan sponsor is not applying for the retiree drug subsidy, the sponsor may be eligible to use a simplified determination that its prescription drug coverage is creditable. The standards for the simplified determination, which are described below, vary based on whether the employer’s prescription drug coverage is “integrated” with other types of benefits (such as medical benefits).

A prescription drug plan is deemed to be creditable if it:

  1. Provides coverage for brand-name and generic prescriptions;
  2. Provides reasonable access to retail providers;
  3. Is designed to pay, on average, at least 60 percent of participants’ prescription drug expenses; and
  4. Satisfies at least one of the following*:
    1. The prescription drug coverage has no annual benefit maximum or a maximum annual benefit payable by the plan of at least $25,000;
    2. The prescription drug coverage has an actuarial expectation that the amount payable by the plan will be at least $2,000 annually per Medicare-eligible individual; or
    3. For entities that have integrated health coverage, the integrated health plan has no more than a $250 deductible per year, has no annual benefit maximum or a maximum annual benefit payable by the plan of at least $25,000 and has no less than a $1 million lifetime combined benefit maximum.

*The Affordable Care Act (ACA) prohibits health plans from imposing lifetime and annual limits on the dollar value of essential health benefits.

An integrated plan is a plan where the prescription drug benefit is combined with other coverage offered by the entity (for example, medical, dental or vision) and the plan has all of the following plan provisions:

  • A combined plan year deductible for all benefits under the plan;
  • A combined annual benefit maximum for all benefits under the plan; and
  • A combined lifetime benefit maximum for all benefits under the plan.

A prescription drug plan that meets the above parameters is considered an integrated plan for the purpose of using the simplified method and would have to meet Steps 1, 2, 3 and 4(c) of the simplified method. If it does not meet all of the criteria, then it is not considered to be an integrated plan and would have to meet Steps 1, 2, 3 and either 4(a) or 4(b).

Actuarial Determination

If a plan sponsor cannot use the simplified determination method to determine the creditable coverage status of the prescription drug coverage offered to Medicare-eligible individuals, then the sponsor must make an actuarial determination annually of whether the expected amount of paid claims under the entity’s prescription drug coverage is at least as much as the expected amount of paid claims under the standard Medicare prescription drug benefit. This determination involves the same standard as the first prong of the “gross value” test for the retiree drug subsidy.

CMS has issued guidance that addresses the extent to which account-based arrangements, such as health reimbursement arrangements (HRAs), may be considered in the creditable coverage determination. In general, this guidance provides that the HRA annual contribution may be taken into consideration when determining creditable coverage status. Existing funds in the HRA that have rolled over from prior years are not taken into account. Also, for HRAs that pay both prescription drugs and other medical costs, a portion of the year’s contribution should be reasonably allocated to prescription drugs.

DISCLOSURES TO INDIVIDUALS

In addition to the annual disclosure to CMS, group health plan sponsors must disclose to individuals who are eligible for Medicare Part D whether the plan’s prescription drug coverage is creditable. At a minimum, creditable coverage disclosure notices must be provided to individuals at the following times:

  • Prior to the Medicare Part D annual coordinated election period—beginning Oct. 15 through Dec. 7 of each year
  • Prior to an individual’s initial enrollment period for Part D
  • Prior to the effective date of coverage for any Medicare-eligible individual who joins the plan
  • Whenever prescription drug coverage ends or changes so that it is no longer creditable or becomes creditable
  • Upon a beneficiary’s request

If the creditable coverage disclosure notice is provided to all plan participants annually, before Oct. 15 of each year, items (1) and (2) above will be satisfied. “Prior to,” as used above, means the individual must have been provided with the notice within the past 12 months. In addition to providing the notice each year before Oct. 15, plan sponsors should consider including the notice in plan enrollment materials provided to new hires.

CMS has provided model disclosure notices for plan sponsors to use when disclosing their creditable coverage status to Medicare beneficiaries. The model disclosure notices are available on CMS’ website.

Use our provided resources to stay informed with updated compliance guidelines and regulations - courtesy of JA BENEFITS.

Download the PDF

by 6drachael

ERISA Compliance FAQs: Reporting and Disclosure Rules

Highlights

PLAN DOCUMENT/SPD

  • Employee benefits that are subject to ERISA must be described in a plan document and SPD.
  • For welfare benefits, one document often serves as both the plan document and the SPD.
  • When a plan is insured, a “wrap document” may be used to describe plan benefits.

FORM 5500

  • ERISA-covered employee benefit plans must file a Form 5500 each year, unless an exemption applies.
  • Small welfare plans that are unfunded or insured are exempt.
  • To qualify for the small plan exemption, the plan must have fewer than 100 covered participants at the beginning of the plan year.

ERISA Compliance FAQs: Reporting and Disclosure Rules

The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that sets minimum standards for employee benefit plans maintained by private-sector employers. ERISA includes requirements for both retirement plans (for example, 401(k) plans) and welfare benefit plans (for example, group health plans). ERISA has been amended many times over the years, expanding the protections available to welfare benefit plan participants and beneficiaries.

The Department of Labor (DOL), through its Employee Benefits Security Administration (EBSA), enforces most of ERISA’s provisions. Violating ERISA can have serious and costly consequences for employers that sponsor welfare benefit plans, either through DOL enforcement actions and penalty assessments or through participant lawsuits.

This Compliance Overview includes a set of frequently asked questions (FAQs) to help employers understand ERISA’s requirements for reporting and disclosure.

Links and Resources

PLAN DOCUMENT

Does Every ERISA Plan Need a Written Plan Document?

Yes. If an employer decides to provide benefits that are subject to ERISA, those benefits must be described in a written plan document. The plan document describes the terms of the plan and the plan’s operation and administration. An ERISA plan may exist without a plan document—not having a plan document just means that the plan is out of compliance with ERISA.

Which Topics Must the Plan Document Address?

There are several topics that must be addressed in the written plan document for a welfare benefit plan.

For example, the plan document should address:

  • Benefits and eligibility;
  • Funding of benefits;
  • Treatment of insurance refunds and rebates;
  • Procedures for claims and appeals;
  • Designation of named fiduciary;
  • Plan amendment and termination procedures;
  • Required provisions for group health plans, such as COBRA rights and HIPAA special enrollment;
  • Other legal provisions applicable to certain plans (such as subrogation and reimbursement and coordination of benefits); and
  • Procedures for allocating and delegating plan responsibilities (for example, where certain administrative tasks will be performed by a third party administrator, or TPA).

What Should the Plan Document Look Like?

ERISA does not require that a plan document be in any particular format. The type of plan document depends mainly on the type of plan and the complexity of its benefits. When an ERISA plan is insured, the insurance company’s insurance certificate will often contain detailed benefit information. However, in most cases, the insurance certificate will not contain all of the provisions required for an ERISA plan document. For example, while the certificate may contain a detailed schedule of benefits, it may not address plan amendment and termination procedures.

The standard way of supplementing the certificate is to use a “wrap document” that contains the missing ERISA provisions. This document is called a “wrap document” because it essentially wraps around the certificate to fill in the missing provisions and becomes a single ERISA plan document.

Can Multiple Welfare Benefits Be Combined Into a Single Plan?

Yes. An employer may choose to combine its welfare benefits under a single plan document, creating one large “bundled” plan. An employer may also choose to include certain non-ERISA benefits, such as the Section 125 plan and dependent care FSA, in a bundled plan. Alternatively, an employer may choose to group its benefits into more than one ERISA plan.

The decision of whether to combine (or bundle) welfare benefits often depends on how it will affect the Form 5500 filing obligation.

  • For larger employers, combining different benefits together may simplify the annual reporting requirement because only one Form 5500 will be required for the bundled plan.
  • For smaller employers, however, each benefit offered as a separate plan may qualify for the Form 5500 exemption for small plans. Combining the benefits together under a bundled plan might cause the plan to exceed the threshold for small plans, which would trigger the Form 5500 filing requirement.

Use our provided resources to stay informed with updated compliance guidelines and regulations - courtesy of JA BENEFITS.

Download the PDF

by 6drachael

Form W-2 Reporting Requirements

Form W-2 Reporting Requirements

The Affordable Care Act (ACA) requires employers to report the aggregate cost of employer-sponsored group health plan coverage on their employees’ Forms W-2. The purpose of the reporting requirement is to provide information to employees regarding how much their health coverage costs. The reporting does not mean that the cost of the coverage is taxable to employees.

This reporting requirement was originally effective for the 2011 tax year (for the Forms W-2 due by the end of January 2012). However, the IRS made reporting optional for 2011 for all employers. In addition, the IRS made the reporting requirement optional for small employers (those that file fewer than 250 Forms W-2) until further guidance is issued.

Beginning in 2012, the IRS made the reporting requirement mandatory for large employers. Thus, the W-2 reporting requirement is currently mandatory for large employers, but optional for small employers.

Links and Resources

  • In April 2011, the IRS issued Notice 2011-28 to provide interim guidance on the Form W-2 reporting requirement.

  • The IRS then revised and clarified its interim guidance in Notice 2012-9, issued on Jan. 3, 2012, which provides technical reporting information for employers that include health coverage cost information on Forms W-2 for 2012 and later years.

  • Additional Q&As on this requirement are available on IRS.gov.

Highlights

Summary

  • ACA Section 9002(a) requires employers to disclose the aggregate cost of applicable employer-sponsored coverage provided to employees on the Form W-2.

  • This requirement does not change the requirements with respect to taxable income or the tax exclusion for amounts paid for medical care or coverage.

  • An employer is not required to issue a Form W-2 including the aggregate cost of coverage to an individual if it does not otherwise have to issue a Form W-2 for that person.

FORM W-2 REPORTING REQUIREMENT

ACA Section 9002(a) requires employers to disclose the aggregate cost of applicable employer-sponsored coverage provided to employees on the Form W-2. Section 9002(a) specifically adds this information to the list of other items that must be included on the Form W-2 (such as the individual’s name, social security number, wages, tax deducted, the total amount incurred for dependent care assistance under a dependent care assistance program and the amount contributed to any health savings account (HSA) by the employee or his or her spouse).

The inclusion of this information on the Form W-2 does not change the rules related to taxable income or the tax exclusion for amounts paid for medical care or coverage (which are addressed in another portion of the tax law that is not affected by this change). However, this information may be used to determine whether a plan is a “Cadillac plan” for purposes of the ACA’s excise tax on high-cost health plans that will take effect in 2020.

This does not require an employer to issue a Form W-2 including the cost of coverage to an individual if it does not otherwise have to issue a Form W-2 for that person. For example, an employer would not have to issue a Form W-2 to a retiree or other former employee receiving no reportable compensation.

EMPLOYERS SUBJECT TO THE REPORTING REQUIREMENT

In general, all employers that provide “applicable employer-sponsored coverage” must comply with the Form W-2 reporting requirement. This includes government entities, churches and religious organizations, but does not include Indian tribal governments or tribally chartered corporations wholly owned by an Indian tribal government.

The Form W-2 reporting requirement is currently optional for small employers (those that had to file fewer than 250 Forms W-2 for the prior calendar year). Thus, if an employer is required to file fewer than 250 Forms W-2 for 2014, the employer would not be subject to the reporting requirement for 2015. Small employers will continue to be exempt from the reporting requirement, unless and until the IRS issues further guidance. The IRS confirmed that this transition relief for small employers applies for the 2015 tax year and will continue to apply to future calendar years until the IRS publishes additional guidance. Large employers (those that file 250 or more Forms W-2) were required to comply with the reporting requirement starting in 2012.

The Internal Revenue Code’s aggregation rules do not apply in determining whether an employer filed fewer than 250 Forms W-2 for the prior year. Also, if an employer files fewer than 250 Forms W-2 only because it uses an agent to file them, the employer does not qualify for the small employer exemption.

COVERAGE THAT MUST BE REPORTED

Under the Form W-2 reporting requirement, the information that must be reported relates to “applicable employer-sponsored coverage.” Applicable employer-sponsored coverage is, with respect to any employee, coverage under any group health plan made available to the employee by the employer which is excludable from the employee’s gross income under Code Section 106.

For purposes of this reporting requirement, it does not matter whether the employer or the employee pays for the coverage—it is the aggregate cost of the coverage that must be reported. The aggregate cost of the coverage is determined using rules similar to those used for determining the applicable premiums for COBRA continuation coverage. It must be determined on a calendar year basis.

This reporting rule does not require these types of coverage to be reported on the Form W-2:

  • Coverage under a dental or vision plan that is not integrated into a group health plan providing other types of health coverage;
  • Coverage under a health reimbursement arrangement (HRA);
  • Coverage under a multiemployer plan;
  • Coverage for long-term care;
  • Coverage under a self-insured group health plan that is not subject to COBRA (such as a church plan);
  • Coverage provided by the government primarily for members of the military and their families;
  • Excepted benefits, such as accident or disability income insurance, liability insurance or workers’ compensation insurance;
  • Coverage for a specific disease or illness, hospital indemnity or other fixed indemnity insurance, provided the coverage is offered as independent, noncoordinated benefits and payment for the benefits is taxable to the employee; and
  • Coverage under an employee assistance program (EAP), wellness program or on-site medical clinic if the employer does not charge COBRA beneficiaries a premium for the benefits.

The ACA reporting obligation also does not apply to amounts contributed to an Archer medical savings account (Archer MSA) or to an HSA. Those amounts are already required to be separately accounted for on the Form W-2. Thus, even small employers must report all employer contributions (including an employee’s contributions through a cafeteria plan) to an HSA on Form W-2.

Similarly, salary reduction contributions to a health flexible spending arrangement (health FSA) under a cafeteria plan are not required to be reported. However, if the amount of the health FSA for the plan year (including optional employer flex credits) exceeds the salary reduction elected by the employee for the plan year, the amount of the health FSA minus the salary reduction election must be reported.

Example: ABC Company maintains a cafeteria plan that offers permitted taxable benefits (including cash) and qualified nontaxable benefits (including a health FSA). The plan offers a flex credit in the form of a match of each employee’s salary reduction contribution. Sandy makes a $700 salary reduction election for a health FSA. ABC Company provides an additional $700 to the health FSA to match Sandy’s salary reduction election. The amount of the health FSA for Sandy for the plan year is $1,400. The amount of Sandy’s health FSA ($1,400) for the plan year exceeds the salary reduction election ($700) for the plan year. ABC Company must include $700 ($1,400 health FSA amount minus $700 salary reduction) in determining the aggregate reportable cost.

In addition, employers may include in the Form W-2 reportable amount the cost of coverage that is not required to be included in the aggregate reportable cost, such as HRA coverage, provided the coverage is applicable employer-sponsored coverage and is calculated under a permissible method.

METHODS OF REPORTING

Coverage Provided after Termination of Employment

If an employer provides coverage (such as continuation coverage) to an employee who terminates employment during the year, the employer may apply any reasonable method of reporting the cost of coverage for that year, as long as that method is used consistently for all employees. Regardless of the method used, an employer does not have to report any amount for an employee who requests a Form W-2 before the end of the calendar year in which the employee terminated employment.

Example: Bob is an employee of XYZ Company from January 1 through April 25. Bob had individual coverage under XYZ Company’s group health plan through April 30, with a cost of coverage of $350 per month. Bob elected continuation coverage for the six months following termination of employment, covering the period May 1 through Oct. 31, for which he paid $350 per month. XYZ Company will have applied a reasonable method of reporting Bob’s cost of coverage if it uses either of the following methods consistently for all employees who terminate coverage during the year:

  • Reports $1,400 as the reportable cost under the plan for the year, covering the four months during which Bob performed services and had coverage as an active employee; or
  • Reports $3,500 as the reportable cost under the plan for the year, covering both the monthly periods during which Bob performed services and had coverage as an active employee, and the monthly periods during which Bob had continuation coverage under the plan.

Programs with Non-reportable Benefits

Also, if a program offers benefits that must be reported as well as other benefits that are not subject to reporting, an employer may use any reasonable allocation method to determine the cost of the portion of the program providing a reportable benefit. If the portion of the program that provides a reportable benefit is only incidental in comparison to the portion of the program providing other benefits, the employer is not required to include either portion of the cost on the Form W-2.

Coverage Periods Spanning Calendar Years

If a coverage period, such as the final payroll period of a calendar year, includes December 31 and continues into the next calendar year, the employer has the following options:

  • Treat the coverage as provided during the calendar year that includes December 31;
  • Treat the coverage as provided during the following calendar year; or
  • Allocate the cost of coverage between each of the two calendar years using a reasonable allocation method that is consistently applied to all employees. The allocation method should generally relate to the number of days in the period of coverage that falls within each of the two calendar years.

PENALTIES

Violations of the ACA’s W-2 reporting requirements are subject to existing rules on filing Forms W-2.

A penalty will apply if the employer:
  • Fails to file Form W-2 by the required due date;
  • Fails to include all information required to be shown on Form W-2;
  • Includes incorrect information on Form W-2;
  • Files on paper forms when the employer is required to e-file;
  • Reports an incorrect taxpayer identification number (TIN);
  • Fails to report a TIN; or
  • Fails to file paper Forms W-2 that are machine readable.

An additional penalty may also apply for:
  • Failing to provide the Form W-2 by Jan. 31;
  • Failing to include all information required to be shown on the Form W-2; or
  • Including incorrect information on the Form W-2.

The amount of the penalty is based on when the employer files the correct Form W-2. In 2015, the Trade Preferences Extension Act of 2015 increased the base penalties for failure to file correct information returns or provide individual statements under Code Sections 6721 or 6722. These penalty amounts are indexed to increase with inflation.

The increased penalty amounts are as follows:

*The penalty for failures due to intentional disregard will be equal to the greater of either the listed penalty amount or 10 percent of the aggregate amount of the items required to be reported correctly.

Exceptions

An inconsequential error or omission is not considered a violation. An inconsequential error or omission does not prevent or hinder the IRS from processing the Form W-2, from correlating the information required to be shown on the form with the information shown on the payee’s tax return or from otherwise putting the form to its intended use. Errors and omissions that are never inconsequential are those relating to a TIN, a payee’s surname, a significant item in a payee’s address, any money or dollar amounts and whether the appropriate form was used.

A penalty will not apply if the employer can show that the failure was due to reasonable cause and not to willful neglect. In general, the employer must be able to show that:

  • The failure was due to an event beyond the employer’s control or due to significant mitigating factors; and
  • The employer acted in a responsible manner and took steps to avoid the failure.

Even if an employer cannot show reasonable cause, under the de minimis rule for corrections, the penalty will not apply to a certain number of returns if the employer:

  • Filed those Forms W-2 on or before the required filing date;
  • Either failed to include all of the information required on the form or included incorrect information; and
  • Filed corrections of these forms by Aug. 1.

If an employer meets all of the de minimis rule conditions, the penalty for filing incorrect Forms W-2 will not apply to the greater of 10 Forms W-2 or one-half of 1 percent of the total number of Forms W-2 that the employer is required to file for the calendar year.

COMPLIANCE STEPS FOR EMPLOYERS

Employers that file 250 or more Forms W-2 should ensure that they are in compliance with the W-2 reporting requirement. They should make sure that they can identify the applicable employer-sponsored coverage that is provided to each employee and calculate the aggregate cost of that coverage.

Employers may also have to address questions from employees regarding whether their health benefits are taxable under this reporting requirement. They can assure employees that this reporting is for informational purposes only, to show employees the value of their health care benefits so they can be more informed consumers. The amount reported does not affect tax liability, as the value of the employer contribution to health coverage continues to be excludable from an employee’s income, and is not taxable.

Use our provided resources to stay informed with updated compliance guidelines and regulations - courtesy of JA BENEFITS.

Download the PDF

by 6drachael

Provider Reporting of Health Coverage —Code Section 6055

Highlights

PURPOSE OF § 6055 REPORTING

  • This additional reporting is intended to promote transparency in health plan coverage and costs.
  • It will also provide the government with information to administer the individual mandate, which became effective in 2014.

FORMS USED FOR REPORTING

  • Entities that are reporting under Section 6055 generally will use Form 1094-B and Form 1095-B.
  • Entities that are reporting under both Sections 6055 and 6056 (ALEs that sponsor self-insured plans) will use a combined reporting method on Form 1094-C and Form 1095-C.

Provider Reporting of Health Coverage — Code Section 6055

The Affordable Care Act (ACA) created reporting requirements in Internal Revenue Code (Code) Section 6055. Under these rules, all entities that provide minimum essential coverage (MEC) must report information to the Internal Revenue Service (IRS) about the health plan coverage they provide. Related statements must also be provided to individuals covered by the MEC.

Reporting was first required in early 2016 for calendar year 2015. For the 2018 calendar year:

  • Returns must be filed no later than Feb. 28, 2019, or April 1, 2019, if filed electronically; and
  • Individual statements must be furnished by March 4, 2019.

OVERVIEW

The Section 6055 reporting requirements apply to all providers of MEC. Generally, the following entities are responsible for reporting under Section 6055:

  • Health insurance issuers, for insured coverage;
  • Plan sponsors of self-insured coverage (however, a self-insured plan sponsor that is also an applicable large employer (ALE) will use Forms 1094-C and 1095-C, instead of Forms 1094-B and 1095-B); and
  • Governmental units that provide coverage under a government-sponsored program.

These reporting entities must report information about each individual who was covered under the MEC they provided during the year.

DEADLINES FOR INFORMATION REPORTING

The required forms generally must be filed with the IRS annually, no later than Feb. 28 (March 31, if filed electronically) of the year following the calendar year to which the return relates. Due to a delay, for the 2015 calendar year, returns were required to be filed no later than May 31, 2016, or June 30, 2016, if filed electronically. For the 2016 calendar year, returns were required to be filed no later than Feb. 28, 2017, or March 31, 2017, if filed electronically. For the 2017 calendar year, returns must have been filed by Feb. 28, 2018, or April 2, 2018 (March 31, 2018, being a Saturday), if filed electronically.

For the 2018 calendar year, returns must be filed by Feb. 28, 2019, or April 1, 2019 (March 31, 2019, being a Sunday), if filed electronically.

Each reporting entity must also furnish statements annually to individuals who are provided MEC, generally on or before Jan. 31 of the year immediately following the calendar year to which the statements relate. Due to a delay, for the 2015 calendar year, individual statements must have been furnished no later than March 31, 2016. For the 2016 calendar year, IRS Notice 2016-70 extended the due date for furnishing 2016 Forms 1095-B and 1095-C to individuals to March 2, 2017. For the 2017 calendar year, IRS Notice 2018-06 extended the due date for furnishing 2017 Forms 1095-B and 1095-C to individuals to March 2, 2018.

For the 2018 calendar year, individual statements were required to be furnished by Jan. 31, 2019. However, the IRS has extended the due date for furnishing 2018 Forms 1095-B and 1095-C to individuals. Specifically, Notice 2018-94 extended the due date for furnishing the 2018 Forms 1095-B and 1095-C to individuals to March 4, 2019.

Extensions may be available in certain circumstances. However, an alternate deadline is generally not allowed for employers with non-calendar year plans. Although employers may collect information on a plan year basis, employees will need to receive their individual statements early in the year in order to have the requisite information to correctly and completely file their income tax returns for that year.

LINKS AND RESOURCES

Use our provided resources to stay informed with updated compliance guidelines and regulations - courtesy of JA BENEFITS.

Download the PDF

by 6drachael

Annual Compliance Deadlines for Health Plans

Highlights

Affected Employers

  • Employers that sponsor group health plans are subject to numerous compliance requirements throughout the year.
  • Not all of these compliance requirements will apply to every employer.

Action Steps

  • Health plan sponsors should work with their advisors to determine which recurring deadlines apply to them.
  • In addition to the compliance requirements described in this chart, it’s important for plan sponsors to monitor ongoing ACA developments.

Annual Compliance Deadlines for Health Plans

Employers that provide group health plan coverage to their employees are subject to numerous compliance requirements throughout the year, such as requirements for reporting, participant disclosure, and certain fee payments. Some of these requirements have been in existence for many years (for example, the Form 5500), while others have been added more recently by the Affordable Care Act (ACA).

This Compliance Overview contains a high-level summary of the various compliance requirements and associated deadlines that health plan sponsors should be aware of throughout the year. It also summarizes annual notice requirements for group health plans. Please note that certain deadlines for non-calendar year plans may vary from what is outlined below.

Calendar Year Deadlines

This chart only addresses recurring calendar year compliance deadlines. The chart does not include other requirements that are not based on the calendar year. For example, a plan administrator must provide a COBRA Election Notice to a qualified beneficiary after a qualifying event occurs. This type of notice requirement is not addressed in the chart below. Also, state laws may impose additional obligations. Users of this chart should refer to the specific federal or state law at issue for complete information.

January

Deadline

 Requirement Description

January 31

Form W-2

 Deadline for providing Forms W-2 to employees. The ACA requires employers to report the aggregate cost of employer-sponsored group health plan coverage on their employees’ Forms W-2. The purpose is to provide employees with information on how much their health coverage costs. Certain types of coverage are not required to be reported on Form W-2.

This Form W-2 reporting requirement is currently optional for small employers (those who file fewer than 250 Forms W-2). Employers that file 250 or more Forms W-2 are required to comply with the ACA’s reporting requirement.

January 31

Form 1095-C or Form 1095-B—Annual Statement to Individuals

 Applicable large employers (ALEs) subject to the ACA’s employer shared responsibility rules must furnish Form 1095-C (Section 6056 statements) annually to their full-time employees. Employers with self-insured health plans that are not ALEs must furnish Form 1095-B (Section 6055 statements) annually to covered employees.

The Forms 1095-B and 1095-C are due on or before Jan. 31 of the year immediately following the calendar year to which the statements relate. Extensions may be available in certain limited circumstances. However, an alternate deadline generally is not available for ALEs that sponsor non-calendar year plans.

Update: The IRS extended the deadline for furnishing the 2018 employee statements, from Jan. 31, 2019, to March 4, 2019.  

February

Deadline

 Requirement Description

February 28

(March 31, if filing electronically)

Section 6055 and 6056 Reporting

 Under Section 6056, ALEs subject to the ACA’s employer shared responsibility rules are required to report information to the IRS about the health coverage they offer (or do not offer) to their full-time employees. ALEs must file Form 1094-C and Form 1095-C with the IRS annually.

Under Section 6055, self-insured plan sponsors are required to report information about the health coverage they provided during the year. Self-insured plan sponsors must generally file Form 1094-B and Form 1095-B with the IRS annually.

ALEs that sponsor self-insured plans are required to report information to the IRS under Section 6055 about health coverage provided, as well as information under Section 6056 about offers of health coverage. ALEs that sponsor self-insured plans will generally use a combined reporting method on Form 1094-C and Form 1095-C to report information under both Sections 6055 and 6056.

All forms must be filed with the IRS annually, no later than Feb. 28 (March 31, if filed electronically) of the year following the calendar year to which the return relates. Reporting entities that are filing 250 or more returns must file electronically. There is no alternate filing date for employers with non-calendar year plans.

March

Deadline

 Requirement Description

March 1 (calendar year plans)

Medicare Part D Disclosure to CMS

 Group health plan sponsors that provide prescription drug coverage to Medicare Part D eligible individuals must disclose to the Centers for Medicare & Medicaid Services (CMS) whether prescription drug coverage is creditable or not. In general, a plan’s prescription drug coverage is considered creditable if its actuarial value equals or exceeds the actuarial value of the Medicare Part D prescription drug coverage. Disclosure is due:

  • Within 60 days after the beginning of each plan year;
  • Within 30 days after the termination of a plan’s prescription drug coverage; and
  • Within 30 days after any change in the plan’s creditable coverage status.

Plan sponsors must use the online disclosure form on the CMS Creditable Coverage webpage.

July

Deadline

 Requirement Description

July 31

PCORI Fee

 Deadline for filing IRS Form 720 and paying Patient-Centered Outcomes Research Institute (PCORI) fees for the previous year. For insured health plans, the issuer of the health insurance policy is responsible for the PCORI fee payment. For self-insured plans, the PCORI fee is paid by the plan sponsor.

The PCORI fees are temporary—the fees do not apply to plan years ending on or after Oct. 1, 2019. This means that, for calendar year plans, the PCORI fees do not apply for the 2019 plan year.

July 31

Form 5500

 Plan administrators of ERISA employee benefit plans must file Form 5500 by the last day of the seventh month following the end of the plan year, unless an extension has been granted. Form 5500 reports information on a plan’s financial condition, investments and operations. Form 5558 is used to apply for an extension of two and one-half months to file Form 5500.

Small health plans (fewer than 100 participants) that are fully insured, unfunded or a combination of insured/unfunded, are generally exempt from the Form 5500 filing requirement.

The Department of Labor’s (DOL) website and the latest Form 5500 instructions provide information on who is required to file and detailed information on filing.

September

Deadline

 Requirement Description

September 30

Medical Loss Ratio (MLR) Rebates

 The deadline for issuers to pay medical loss ratio (MLR) rebates for the 2014 reporting year and beyond is Sept. 30. The ACA requires health insurance issuers to spend at least 80 to 85 percent of their premiums on health care claims and health care quality improvement activities. Issuers that do not meet the applicable MLR percentage must pay rebates to consumers.

Also, if the rebate is a “plan asset” under ERISA, the rebate should, as a general rule, be used within three months of when it is received by the plan sponsor. Thus, employers who decide to distribute the rebate to participants should make the distributions within this three-month time limit.

September 30 (calendar year plans)

Summary Annual Report

 Plan administrators must automatically provide participants with the summary annual report (SAR) within nine months after the end of the plan year, or two months after the due date for filing Form 5500 (with approved extension).

Plans that are exempt from the annual 5500 filing requirement are not required to provide an SAR. Large, completely unfunded health plans are also generally exempt from the SAR requirement.

October

Deadline

 Requirement Description

October 15

Medicare Part D – Creditable Coverage Notices

 Group health plan sponsors that provide prescription drug coverage to Medicare Part D eligible individuals must disclose whether the prescription drug coverage is creditable or not. Medicare Part D creditable coverage disclosure notices must be provided to participants before the start of the annual coordinated election period, which runs from Oct. 15-Dec. 7 of each year. Coverage is creditable if the actuarial value of the coverage equals or exceeds the actuarial value of coverage under Medicare Part D. This disclosure notice helps participants make informed and timely enrollment decisions.

Disclosure notices must be provided to all Part D eligible individuals who are covered under or apply for, the plan’s prescription drug coverage, regardless of whether the prescription drug coverage is primary or secondary to Medicare Part D.

Model disclosure notices are available on CMS’ website.

Annual Notices

Type of Notice Description

WHCRA Notice

 The Women’s Health and Cancer Rights Act (WHCRA) requires group health plans that provide medical and surgical benefits for mastectomies to also provide benefits for reconstructive surgery. Group health plans must provide a notice about the WHCRA’s coverage requirements at the time of enrollment and on an annual basis after enrollment. The initial enrollment notice requirement can be satisfied by including information on WHCRA’s coverage requirements in the plan’s summary plan description (SPD). The annual WHCRA notice can be provided at any time during the year. Employers with open enrollment periods often include the annual notice with their open enrollment materials. Employers that redistribute their SPDs each year can satisfy the annual notice requirement by including the WHCRA notice in their SPDs.

Model language is available in the DOL’s compliance assistance guide.

CHIP Notice

If an employer’s group health plan covers residents in a state that provides a premium subsidy under a Medicaid plan or CHIP, the employer must send an annual notice about the available assistance to all employees residing in that state. The annual CHIP notice can be provided at any time during the year. Employers with annual enrollment periods often provide the CHIP notice with their open enrollment materials.

The DOL has a model notice that employers may use.

Summary of Benefits and Coverage (SBC)

 Group health plans and health insurance issuers are required to provide an SBC to applicants and enrollees each year at open enrollment or renewal time. The purpose of the SBC is to allow individuals to easily compare their options when they are shopping for or enrolling in health plan coverage. Federal agencies have provided a template for the SBC, which health plans and issuers are required to use.

The issuer for fully insured plans usually prepares the SBC. If the issuer prepares the SBC, an employer is not also required to prepare an SBC for the health plan, although the employer may need to distribute the SBC prepared by the issuer.

The SBC must be included in open enrollment materials. If renewal is automatic, the SBC must be provided no later than 30 days prior to the first day of the new plan year. However, for insured plans, if the new policy has not yet been issued 30 days prior to the beginning of the plan year, the SBC must be provided as soon as practicable, but no later than seven business days after the issuance of the policy.

Grandfathered Plan Notice

 To maintain a plan’s grandfathered status, the plan sponsor or must include a statement of the plan’s grandfathered status in plan materials provided to participants describing the plan’s benefits (such as the summary plan description, insurance certificate and open enrollment materials). The DOL has provided a model notice for grandfathered plans. This notice only applies to plans that have grandfathered status under the ACA.

Notice of Patient Protections

 If a non-grandfathered plan requires participants to designate a participating primary care provider, the plan or issuer must provide a notice of patient protections whenever the SPD or similar description of benefits is provided to a participant. This notice is often included in the SPD or insurance certificate provided by the issuer (or otherwise provided with enrollment materials).

The DOL provided a model notice of patient protections for plans and issuers to use.

HIPAA Privacy Notice

 The HIPAA Privacy Rule requires self-insured health plans to maintain and provide their own privacy notices. Special rules, however, apply for fully insured plans. Under these rules, the health insurance issuer, and not the health plan itself, is primarily responsible for the privacy notice.

Self-insured health plans are required to send the privacy notice at certain times, including to new enrollees at the time of enrollment. Thus, the privacy notice should be provided with the plan’s open enrollment materials. Also, at least once every three years, health plans must either redistribute the privacy notice or notify participants that the privacy notice is available and explain how to obtain a copy.

The Department of Health and Human Services (HHS) has model Privacy Notices for health plans to choose from.

HIPAA Special Enrollment Notice

 At or prior to the time of enrollment, a group health plan must provide each eligible employee with a notice of his or her special enrollment rights under HIPAA. This notice should be included with the plan’s enrollment materials. It is often included in the health plan’s SPD or insurance booklet. Model language is available in the DOL’s compliance assistance guide.

Wellness Notice HIPAA

 Employers with health-contingent wellness programs must provide a notice that informs employees that there is an alternative way to qualify for the program’s reward. This notice must be included in all plan materials that describe the terms of the wellness program. If wellness program materials are being distributed at open enrollment (or renewal time), this notice should be included with those materials. Sample language is available in the DOL’s compliance assistance guide.

Wellness Notice ADA

 To comply with the Americans with Disabilities Act (ADA), wellness plans that collect health information or involve medical exams must provide a notice to employees that explains how the information will be used, collected and kept confidential. Employees must receive this notice before providing any health information and with enough time to decide whether to participate in the program. Employers that are implementing a wellness program for the upcoming plan year should include this notice in their open enrollment materials. The Equal Employment Opportunity Commission has provided a sample notice for employers to use.

Use our provided resources to stay informed with updated compliance guidelines and regulations - courtesy of JA BENEFITS.

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by 6drachael

Employer Reporting of Health Coverage—Code Section 6056

Highlights

PURPOSE OF §6056 REPORTING

  • This additional reporting is intended to promote transparency in health plan coverage and costs.

  • It will also provide the government with information to administer the employer shared responsibility rules, which imposes penalties on ALEs that do not offer affordable, minimum value coverage to their full-time employees (and dependents).

FORMS USED FOR REPORTING

ALEs that are reporting under Section 6056 will use:

  • Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Return; and
  • Form 1095-C, Employer-Provided Health Insurance Offer and Coverage.

Employer Reporting of Health Coverage—Code Section 6056

The Affordable Care Act (ACA) created reporting requirements in Internal Revenue Code (Code) Section 6056. Under these rules, applicable large employers (ALEs) subject to the ACA’s employer shared responsibility rules must provide information to the Internal Revenue Service (IRS) about the health coverage they offered to their full-time employees. Related statements must also be provided to each of the ALE’s full-time employees.

Reporting was first required in early 2016 for calendar year 2015. For the 2018 calendar year:

  • Returns must be filed no later than Feb. 28, 2019, or April 1, 2019, if filed electronically; and
  • Individual statements must be furnished by March 4, 2019.

This ACA Overview describes the Section 6056 reporting requirements.

Links and Resources

FILING REQUIREMENTS—REQUIRED FORMS

Under Section 6056, each ALE is required to file all of the following with the IRS:

  • A single transmittal form (Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Return) for all of the returns filed for a given calendar year; and
  • A separate employee statement (Form 1095-C, Employer-Provided Health Insurance Offer and Coverage) for each full-time employee.

Substitute statements that comply with applicable requirements may be used, as long as the required information is included. ALEs using substitute forms instead of the official IRS versions may develop substitute forms themselves or buy them from a private printer. Publication 5223, General Rules & Specifications for Substitute ACA Forms 1094-B, 1095-B, 1094-C, and 1095-C and Certain Other Information, explains the requirements for the format and content of substitute statements to recipients. Only forms that conform to the official form and the specifications in Publication 5223 are acceptable for filing with the IRS. ALEs may not request special consideration.

DEADLINES FOR FILING WITH THE IRS AND FURNISHING STATEMENTS TO EMPLOYEES

The required forms generally must be filed with the IRS annually, no later than Feb. 28 (March 31, if filed electronically) of the year following the calendar year to which the return relates. Due to a delay, for the 2015 calendar year, returns were required to be filed no later than May 31, 2016, or June 30, 2016, if filed electronically. For the 2016 calendar year, returns were required to be filed no later than Feb. 28, 2017, or March 31, 2017, if filed electronically. For the 2017 calendar year, returns must have been filed by Feb. 28, 2018, or April 2, 2018 (March 31, 2018, being a Saturday), if filed electronically.

For the 2018 calendar year, returns must be filed by Feb. 28, 2019, or April 1, 2019 (March 31, 2019, being a Sunday), if filed electronically.

Each ALE must also furnish statements annually to its full-time employees, generally on or before Jan. 31 of the year immediately following the calendar year to which the statements relate. Due to a delay, for the 2015 calendar year, individual statements must have been furnished no later than March 31, 2016. For the 2016 calendar year, IRS Notice 2016-70 extended the due date for furnishing 2016 Forms 1095-B and 1095-C to individuals from Jan. 31, 2017, until March 2, 2017. For the 2017 calendar year, IRS Notice 2018-06 extended the due date for furnishing the 2017 Forms 1095-B and 1095-C to individuals from Jan. 31, 2018, until March 2, 2018.

For the 2018 calendar year, individual statements were required to be furnished by Jan. 31, 2019. However, on Nov. 29, 2019, IRS Notice 2018-94 extended the furnishing deadline for the 2018 calendar year to March 4, 2019. The extended deadline is March 4, rather than March 2 as in prior years, because March 2, 2019, is a Saturday.

Extensions may be available in certain circumstances. However, an alternate deadline is generally not allowed for ALEs with non-calendar year plans. Although ALEs may collect information on a plan year basis, employees will need to receive their individual statements early in the year in order to have the requisite information to correctly and completely file their income tax returns for that year.

Use our provided resources to stay informed with updated compliance guidelines and regulations - courtesy of JA BENEFITS.

Download the PDF

by 6drachael

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Employer Reporting of Health Coverage —Code Sections 6055 & 6056

Highlights

REPORTING ENTITIES

  • Section 6055 applies to health insurance issuers, self-insured plan sponsors, government agencies that provide government-sponsored coverage and other providers of minimum essential coverage.

  • Section 6056 applies to applicable large employers—the employers subject to the employer shared responsibility rules (those with at least 50 full-time employees, including full-time equivalents).

PURPOSE OF REPORTING

This reporting is intended to:

  • Promote transparency in health plan coverage and costs; and
  • Provide the IRS with information to administer the employer shared responsibility rules and individual mandate.

Employer Reporting of Health Coverage—Code Sections 6055 & 6056

The Affordable Care Act (ACA) created reporting requirements under the Internal Revenue Code (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) to their employees.

This ACA Overview describes the Section 6055 and Section 6056 reporting requirements under the ACA. Please contact JA Benefits, LLC for more information on Section 6055 and Section 6056 reporting.

Links and Resources

OVERVIEW

TYPE OF REPORTING AFFECTED EMPLOYERS REQUIRED INFORMATION

Code §6055—Health coverage reporting by health insurance issuers and sponsors of self-insured plans

Employers with self-insured health plans

Information on each individual provided with coverage (helps the IRS administer the ACA’s individual mandate)

Code §6056—Applicable large employer (ALE) health coverage reporting

Applicable large employers (those with at least 50 full-time employees, including full-time equivalent employees)

Terms and conditions of health plan coverage offered to full-time employees (helps the IRS administer the ACA’s employer shared responsibility penalty)

 

Filing Requirements

Under both Sections 6055 and 6056, each reporting entity must file all of the following with the IRS:

  • A separate statement for each individual who is provided minimum essential coverage (MEC) under Section 6055, or for each of the ALE’s full-time employees under Section 6056; and
  • A single transmittal form for all of the returns filed for a given calendar year.

Under Code Section 6055, reporting entities will generally file Forms 1094-B (a transmittal) and 1095-B (an information return). Under Code Section 6056, entities will file Forms 1094-C (a transmittal) and 1095-C (an information return) for each full-time employee for any month. Entities reporting under both Sections 6055 and 6056 will use a combined reporting method by filing Forms 1094-C and 1095-C.

ALEs that sponsor Self-insured Plans

ALEs that sponsor Fully Insured Plans (or no plan)

Non-ALEs that sponsor Self-insured Plans

Non-ALEs that sponsor Insured Plans (or no plan)

Complete:

Form 1094-C

+

Parts I, II and III of Form 1095-C

Complete:

Form 1094-C

+

Parts I and II of Form 1095-C

File:

Form 1094-B

+

Form 1095-B

These employers are not required to report under either Section 6055 or Section 6056.

To report:

  • Information under Section 6055 about health coverage provided; and
  • Information under Section 6056 about offers of coverage.

To satisfy the Section 6056 reporting requirements. These employers are not required to report under Section 6055.

To satisfy the Section 6055 reporting requirements. These employers are not required to report under Section 6056.

Substitute Statements

Substitute forms may be used, as long as they include all of the required information and comply with IRS procedures or other applicable guidance. Entities using substitute forms instead of the official IRS versions may develop substitute forms themselves or buy them from a private printer. Publication 5223, General Rules & Specifications for Substitute ACA Forms 1094-B, 1095-B, 1094-C, and 1095-C and Certain Other Information, explains the requirements for the format and content of substitute statements to recipients. Only forms that conform to the official form and the specifications in Publication 5223 are acceptable for filing with the IRS. Entities may not request special consideration.

DEADLINES FOR FILING WITH THE IRS AND FURNISHING STATEMENTS TO INDIVIDUALS

The Code Sections 6055 and 6056 reporting requirements took effect in 2015. The first returns were due in early 2016 for coverage provided in 2015.

Deadlines for Filing with the IRS

Forms must be filed with the IRS annually, no later than February 28 (March 31, if filed electronically) of the year following the calendar year to which the return relates.

  • Due to a delay in IRS Notice 2016-4, for the 2015 calendar year, returns were required to be filed no later than May 31, 2016, or June 30, 2016, if filed electronically.
  • For the 2016 calendar year, returns were required to be filed no later than Feb. 28, 2017, or March 31, 2017, if filed electronically. The IRS did not extend the due date for filing 2016 calendar year returns with the IRS (in 2017).
  • The IRS also did not extend the due date for filing 2017 calendar year returns with the IRS (in 2018). Therefore, for the 2017 calendar year, returns must have been filed by Feb. 28, 2018, or April 2, 2018 (March 31, 2018, being a Saturday), if filed electronically.

For the 2018 calendar year, returns must be filed by Feb. 28, 2019, or April 1, 2019 (March 31, 2019, being a Sunday), if filed electronically.

Reporting entities may receive an automatic 30-day extension of time to file with the IRS by completing and filing Form 8809, Application for Extension of Time To File Information Returns, by the due date of the returns. The form may be submitted on paper, or through the FIRE System either as a fill-in form or an electronic file. No signature or explanation is required for the extension. Under certain hardship conditions, employers could have also applied for an additional 30-day extension.

Deadlines for Furnishing to Individuals

Each reporting entity must also furnish statements annually to each individual who is provided MEC (under Section 6055), and each of the ALE’s full-time employees (under Section 6056). Individual statements are due on or before January 31 of the year immediately following the calendar year to which the statements relate. Due to a delay in IRS Notice 2016-4, for the 2015 calendar year, individual statements were required to be furnished no later than March 31, 2016. For the 2016 calendar year, IRS Notice 2016-70 extended the due date for furnishing 2016 Forms 1095-B and 1095-C to individuals to March 2, 2017. For the 2017 calendar year, IRS Notice 2018-06 extended the due date for furnishing 2017 Forms 1095-B and 1095-C to individuals to March 2, 2018.

For the 2018 calendar year, IRS Notice 2018-94 extended the due date for furnishing 2018 Forms 1095-B and 1095-C to individuals, from Jan. 31, 2019, until March 4, 2019. The extension applies automatically and does not require the submission of any request or other documentation to the IRS. In view of this automatic extension, the rules allowing the IRS to grant extensions of time of up to 30 days to furnish Forms 1095-B or 1095-C do not apply to the extended due date. Also, because the 30-day extension of the due date to furnish applies automatically, and is as generous as the permissive 30-day extensions of time to furnish 2018 information statements under Section 6056 that have already been requested by some reporting entities in submissions to the IRS, the IRS will not formally respond to those requests.

The final rules do not allow an alternate filing date for employers with non-calendar year plans. Although employers may collect information on a plan year basis, employees will need to receive their individual statements early in the year in order to have the requisite information to correctly and completely file their income tax returns for that year.

However, extensions may be available in certain circumstances. Reporting entities may request an extension of time to furnish the statements to recipients by sending a letter to Internal Revenue Service, Information Returns Branch, Attn: Extension of Time Coordinator, 240 Murall Drive, Mail Stop 4360, Kearneysville, WV 25430. The letter must include: the filer’s name, TIN and address; the type of return; a statement that extension request is for providing statements to recipients; a reason for delay; and the signature of the filer or authorized agent.

A request must be postmarked by the date on which the statements are due to the recipients. If the request for an extension is approved, reporting entities will generally be granted a maximum of 30 extra days to furnish the recipient statements.

MANNER OF FILING AND FURNISHING

Any reporting entity that is required to file at least 250 returns under Section 6055 or Section 6056 must file electronically. The 250-or-more requirement applies separately to each type of return and separately to each type of corrected return. Entities filing fewer than 250 returns during the calendar year may choose to file in paper form, but are permitted (and encouraged) to file electronically. Individual statements may also be furnished electronically if certain notice, consent and hardware and software requirements are met.

Electronic filing is done using the ACA Information Returns (AIR) Program. IRS Publication 5165, Guide for Electronically Filing ACA Information Returns for Software Developers and Transmitters provides very detailed technical information regarding standards for software developers and transmitters that plan to facilitate this electronic reporting through the AIR System. More information on the AIR Program is available on the IRS website.

Waiver of the Electronic Reporting Requirement

A waiver from the requirement to file returns electronically is available in certain circumstances. To receive a waiver, reporting entities must submit Form 8508, Request for Waiver From Filing Information Returns Electronically. Entities are encouraged to submit Form 8508 at least 45 days before the due date of the returns, but no later than the due date of the returns. The IRS does not process waiver requests until January 1 of the calendar year the returns are due.

Reporting entities cannot apply for a waiver for more than one tax year at a time, and must reapply at the appropriate time for each year in which a waiver is required. Any approved waivers should be kept for the reporting entity’s records only. A copy of an approved waiver should not be sent to the service center where paper returns are filed.

If a waiver for original returns is approved, any corrections for the same types of returns will be covered under the waiver. However, if original returns are submitted electronically, but the reporting entity wants to submit corrections on paper, a waiver must be approved for the corrections if the reporting entity must file 250 or more corrections.

Without an approved waiver, a reporting entity that is required to file electronically but fails to do so may be subject to a penalty of up to $260 per return (as adjusted each year), unless it can establish reasonable cause. However, reporting entities can file up to 250 returns on paper; those returns will not be subject to a penalty for failure to file electronically.

APPLICABLE LARGE EMPLOYER HEALTH COVERAGE REPORTING (CODE § 6056)

Code Section 6056 requires ALEs subject to the ACA’s employer shared responsibility rules to file information returns with the IRS and provide statements to their full-time employees about the health insurance coverage the employer offered to its full-time employees. The IRS uses the information provided on the information returns to administer the ACA’s employer shared responsibility rules, which impose penalties on ALEs that do not offer affordable, minimum value coverage to their full-time employees (and dependents).

The employer shared responsibility rules generally took effect on Jan. 1, 2015. The IRS and the ALE’s employees will use the information provided as part of the determination of whether an employee is eligible for a premium tax credit for coverage purchased through an Exchange under the ACA.

ALEs will use the following forms to report under Section 6056, as well as for combined reporting by ALEs who report under both Sections 6055 and 6056:

  • Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns; and
  • Form 1095-C, Employer-Provided Health Insurance Offer and Coverage.

Affected Employers

The Section 6056 reporting requirements apply to ALEs subject to the ACA’s employer shared responsibility rules. An ALE is an employer that employed an average of at least 50 full-time employees, including full-time equivalents (FTEs), on business days during the preceding calendar year. Full-time employees are those employed, on average, at least 30 hours of service per week. An employee’s full-time status for this purpose is determined under either the look-back measurement method or the monthly measurement method, as described in the employer shared responsibility final rules.

Section 6056 applies to all employers that are ALEs, regardless of whether coverage is offered to full-time employees, and regardless of whether the ALE is a tax-exempt or government entity (including federal, state, local and Indian tribal governments). However, only ALEs with full-time employees are subject to the Section 6056 requirements (and only with respect to their full-time employees). Thus, ALEs without any full-time employees are not subject to the Section 6056 reporting requirements.

Controlled Group Rules

For purposes of Section 6056, related employers are treated as a single employer for determining employer size if they meet certain IRS criteria. Thus, all persons treated as a single employer under Code Sections 414(b), (c), (m) or (o) are combined and treated as a single employer for purposes of determining whether or not the employer has at least 50 full-time (and FTE) employees, and together will be an ALE (called an Aggregated ALE Group). When the combined total of full-time (and FTE) employees meets the threshold, each separate company (or ALE member) is separately subject to the Section 6056 reporting requirements, even if any particular company individually does not employ enough employees to meet the 50-full-time-and-FTE-employee threshold.

However, each ALE (and each ALE member) is responsible for its own reporting obligations. For purposes of the information reporting requirements under Section 6056, each ALE member must file an information return with the IRS and furnish statements to its full-time employees, using its own employer identification number (EIN).

ALEs That Sponsor Self-Insured Plans

ALEs that sponsor self-insured group health plans are also required to report information to the IRS and provide individual statements to covered individuals under Section 6055 about the health coverage they provided during the year. The IRS and individuals will use the information provided under Section 6055 to administer the ACA’s individual mandate.

These ALEs file with the IRS and furnish to employees the information required under both Sections 6055 and 6056 on a single form, using a combined reporting method. This combined reporting method is described in more detail below.

Excluded Employers

Non-ALE employers that are not subject to the ACA’s employer shared responsibility rules are not required to report under Section 6056. Thus, employers that employed fewer than 50 full-time (and FTE) employees during the prior calendar year are not subject to these reporting requirements. However, any employer that sponsors a self-insured health plan is required to report under Section 6055, even if it has fewer than 50 full-time (and FTE) employees.

Reporting Required for All Full-time Employees

Under Section 6056, each ALE is required to report information about the health coverage, if any, offered to its full-time employees (and their dependents), including whether an offer of health coverage was (or was not) made. This requirement applies to all ALEs, regardless of whether they offered health coverage to all, none or some of their full-time employees.

For each full-time employee—regardless of whether health coverage was offered to the employee—the ALE must file a return with the IRS and furnish a statement to the employee reporting whether an offer of health coverage was or was not made to the employee, and if an offer was made, the required information about the offer. Therefore, even if an ALE does not offer coverage to any full-time employees, it must file returns with the IRS and furnish statements to each of its full-time employees to report information specifying that coverage was not offered.

An ALE is not required to file a Form 1095-C for an individual who, for all months of a calendar year, is either not an employee of the ALE or is in a limited non-assessment period (for example, an employee who was hired mid-year and then was in an initial measurement period that continued into the following year). However, for the months in which the employee was an employee of the ALE, he or she would be included in the total employee count reported on Form 1094-C. Also, if the employee enrolled in self-insured employer-sponsored coverage during the limited non-assessment period, the ALE must file a Form 1095-C for the employee to report coverage information for the year.

Use our provided resources to stay informed with updated compliance guidelines and regulations - courtesy of JA BENEFITS.

Download the PDF

by 6drachael