December 3, 2019
On December 2, 2019 the IRS issued its seemingly annual transition relief Notice which, among other items, provides an automatic extension from the deadline to furnish the Form 1095-C statements to individuals. Additionally, the IRS again extended the good faith efforts standard to the 2019 Forms. This year the Notice provides new transition relief provisions related to the fact that the Individual Mandate is $0 beginning in 2019. The details of the Notice are discussed in the remainder of this article.
Notice 2019-63 provides transition relief by extending the due date for the Form 1095-C statements that were to be furnished to individuals by January 31, 2020 to March 2, 2020. Importantly, the permissive extension discussed in the instructions to the Form 1095-C no longer applies to the individual statement deadline. Therefore, the March 2, 2020 deadline for furnishing the Form 1095-C statements is now a hard deadline. The Notice states the Service will not even respond to employers requesting an extension beyond the March 2, 2020 deadline.
Similar to previous years, Notice 2019-63 does not provide an extension for the Forms 1094-C and 1095-C which are to be provided to the IRS. 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. An employer can still complete a Form 8809 to receive an automatic 30 day extension.
Notice 2019-63 also extends the good faith efforts standard to the 2019 Forms so long as an employer complies with the new deadline for furnishing the statement to individuals and the deadline for filing the Forms 1094-C and 1095-C with the IRS. This portion of the relief should be more pertinent to employers this year, as the IRS did enforce penalties under IRC sections 6721 and 6722 in 2019 for previous tax years. The good faith efforts standards can provide relief under both of those provisions so long as the conditions discussed in the Notice are satisfied. The transition relief discussed in theNotice only applies to the 2019 Forms.
Finally, Notice 2019-63 provided new transition relief for entities supplying the Form 1095-B to individuals and, in certain very limited circumstances, for self-insured employers providing the Form 1095-C to individuals. This new transition relief is being provided as a result of the Individual Mandate being reduced to $0 beginning in 2019. The Notice states the IRS will not assess a penalty under IRC section 6722 against an entity for not furnishing a Form 1095-B to an individual so long as the following two conditions are satisfied:
The reporting entity prominently posts a notice on its website that an individual may receive a copy of their Form 1095-B upon request. The prominently placed notice must include an email address and a physical address to which the request for the Form 1095-B may be made. Additionally, the notice on the website must include a phone number that individuals can contact with questions.
The reporting entity must provide a Form 1095-B within 30 days to any individual who requests their Form 1095-B.
The IRS only extended the transition relief discussed above to IRC section 6055 reporting (i.e. the Form 1095-B). Unfortunately, the transition relief provision was not extended to IRC section 6056 reporting (i.e. the Form 1095-C). For self-insured employers who use combined reporting (i.e. reporting for both IRC sections 6055 and 6056) by completing the Form 1095-C Parts I, II, and III the rule is the employer must furnish a Form 1095-C to any full-time employee by the March 2, 2020 deadline. If an employer extended coverage to an individual who was not a full-time employee for any month during 2019 and the two conditions discussed above are satisfied, an IRC section 6722 penalty will not be assessed against an employer with respect to those individuals. Given the conditions required to not provide a Form 1095-C to an individual and how few Forms 1095-C are provided to individuals who are not full-time employees, it is probably simplest just to provide a Form 1095-C to every individual.
The IRS has been harsher with its penalties as the ACA has aged. Timely and accurate reporting is always the best approach. Should you have any additional questions or need assistance filing the Forms 1094-C and 1095-C, please contact us.
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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