November 15, 2019
The IRS released the draft instructions to the Forms 1094-C and 1095-C on November 13, 2019. While many, including us, as discussed in our previous article, expected some changes as a result of the Individual Mandate being reduced to $0 beginning in 2019 the draft instructions were virtually identical compared to the 2018 iteration of the instructions. The remainder of the article touches on the few changes, almost entirely numerical, that were made to the 2019 instructions.
With regard to the Individual Mandate, the only change occurred on the first page of the second column of the first full paragraph. Previous iterations of the instructions had discussed how the Form 1095-C is used to assist the IRS in determining if an employee is subject to the Individual Mandate for employers who sponsor a self-insured plan. With the Individual Mandate being reduced to $0 in 2019, the language referencing the Individual Mandate was removed.
The only other changes made in the instructions are references to numbers that fluctuate year-to-year for inflation like numbers. The cap on the total penalty amounts the IRS can assess under Internal Revenue Code sections 6721 and 6722 were increased to $3,339,000 in 2019 compared to $3,275,000 in 2018. Additionally, the affordability threshold percentage in 2019 was 9.86 percent compared to 9.56 percent in 2018. Those numbers are reflected in the 2019 instructions.
The rest of the instructions to the Forms 1094-C and 1095-C are unchanged. Therefore, employers are still responsible for furnishing the Form 1095-C to the requisite full-time employees by the January 31, 2020 deadline. The deadline to file the Forms 1094-C and 1095-C with the IRS is February 28, 2020 if the employer is filing on paper. If an employer is filing electronically, the deadline is March 31, 2020. Please contact Accord Systems if you have any questions or need assistance filing the Forms 1094-C and 1095-C.
About the author – Ryan Moulder serves as General Counsel at Accord Systems, LLC and is a Partner at Health Care Attorneys P.C. Ryan received his LL.M. from Georgetown University Law Center and his J.D. from Saint Louis University School of Law. He has distinguished himself as a leader in the Affordable Care Act arena and has written and spoken on a variety of ACA topics as it relates to compliance for companies.
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