IRS Proposes Automatic Extension For Furnishing 1095-C Forms

On November 22, the IRS issued proposed rules that would permanently provide an automatic extension for furnishing Forms 1095-C and 1095-B to individuals, from January 31 to March 2. The Proposed Rule allows ALEs to voluntarily adopt this extension for calendar years beginning after December 31, 2020, which would mean that this would apply to calendar year 2021 Form 1095-C.  It's important to note that this does not change the due dates for filing these forms with the IRS.

2021 Final Forms 1094 and 1095 Released
The final forms contain very few changes from prior years. However, reference to relief for reporting errors has been removed from the instructions (see more below). The Form 1095-C also contains two new codes for employers who sponsor an individual coverage health reimbursement arrangement (ICHRA).
 

Alternative for Insurer-Furnished Statements: The proposed regulations include an alternative way for insurers and small self-funded employers to provide Forms 1095-B to individuals: Instead of delivering the Form 1095-B to the individual, the insurer and self-funded employers would be able to post a notice on its website and provide the form on request. The intention is to ease reporting requirements mainly due to the fact that the information has little use since Congress lowered the penalty for the Individual Mandate to $0. 

• Posting must be a clear and conspicuous notice in location on its website that is reasonably accessible to individuals stating that individuals may receive a copy of their 1095-B upon request, accompanied by an email address, phone number and a physical address the request can be sent;
• Furnish an individual with a Form 1095-B within 30 days of a request; and
• Retain the notice in the same location of its website until October 15 – or the first business day following October 15 if October 15 falls on a weekend or holiday – of the next calendar year. This would be October 15, 2023 for the tax year 2021 Form 1095-B.

No More Good-Faith Compliance:  Finally, the regulations would codify the elimination of the penalty relief that has historically applied to “good faith” reporting efforts. (The IRS had previously announced in Notice 2020-76 that it would not continue to renew this relief.) The regulations would apply for calendar years beginning after December 31, 2021, and taxpayers may rely on them for calendar years beginning after December 31, 2020.

The IRS may impose penalties of up to $280 per form for providing a participant with an inaccurate or incomplete forms. A separate $280 per form penalty could be applied for the same mistake in the forms filed with the IRS, potentially triggering a penalty of up to $560 per employee.

Filing Deadlines
Here are the critical filing deadlines for 2021 coverage:

In addition, employers required to comply with state individual mandate employer reporting requirements may face earlier deadlines. Currently, four states (CA, MA, NJ, RI) and Washington D.C. have coverage reporting requirements.
 
All of these items and more are covered in our updated Amwins Connect 1095-C & 1094-C Employer Reporting Guide.

If your group clients needs services for ACA Reporting Compliance or IRS Penalty Support, Contact your Amwins Connect Sales Team for a referral to our valued partners.