On December 15, 2022, the Internal Revenue Service (IRS) issued final regulations that permanently extend by 30 days the deadline for furnishing Form 1095-C and Form 1095-B to individuals. The forms will now be due on March 2 (March 3 in a leap year), or the next business day if the due date falls on a weekend or holiday. The proposed regulations were issued in November 2021.
The Affordable Care Act (ACA) requires employers with 50 or more full-time equivalent employees to report whether they offered minimum essential coverage (MEC) that was affordable and also meets the minimum value standard or potentially face a fine. Employers of any size with self-insured plans also report months of coverage for all enrolled individuals. This information is reported to the IRS using Forms 1094-C and 1095-C. Employers must distribute copies of the Form 1095-C to full-time employees which contains information they may need to report as part of their tax submission. The IRS has set the deadline for furnishing form 1095-C to employees, on March 2, 2022, marking a permanent 30-day extension. The deadline for filing forms with the IRS is February 28, 2022, for those who choose to file paper copies, and March 31, 2022, for those choosing to file electronically.
The final regulations provide an alternative manner for furnishing Form 1095-B or C to individuals. In order to use the alternative method, a “clear and conspicuous notice” must be provided on the insurer’s website stating that an individual can receive a copy of the form on request.
The final regulations confirm that 2020 was the final year of the extension of good-faith relief from penalties for incorrect or incomplete information. The regulations provide that the relief, which began in calendar year 2015, was intended to be transitional and is no longer appropriate.
The final regulations are effective December 15, 2022. Although the final regulations make the 30-day extension for issuing individual Form 1095s permanent, it is still important to report and file these forms on a timely basis, and to correct any errors. This is particularly important in light of the elimination of the transitional good-faith relief after 2020. Employers should work to ensure proper document and reporting protocols are implemented to avoid ACA non-compliance penalties (currently, up to $280 per incorrect form).
For help with 1095 reporting, contact any member of the FH Insurance Benefits Team.