Those affected by the employer reporting mandate outlined in the Affordable Care Act (ACA) have just been given an early holiday present from the Internal Revenue Service (IRS)! On November 18, the IRS published Notice 2016-70, which gives employees a bit more time to comply with certain requirements and extends some penalty relief to those reporting late but in good faith.
Previously, qualifying employers were required to provide Form 1095-B or Form 1095-C to their employees and other covered individuals by January 31, 2017. That deadline has now been extended to March 2, 2017. Employers are not permitted to ask for any further extension.
Note: Notice 2016-70 does NOT affect the deadline for employers to REPORT ACA information to the IRS via Forms 1094-B and 1095-B or forms 1095-B and 1095-C. Those are still firm at February 28 (for paper forms) and March 31 (for electronic filings). Employers may ask for extensions on these two due dates.
So, to clarify, deadlines for reporting health insurance data to the IRS remain unchanged. The deadline for providing coverage information to employees has been extended to March 2nd.
Employers are subject to penalties for failure to provide the requested forms on time or for providing incomplete or incorrect reports. Per Notice 2016-70, there’s still the potential to find relief from these penalties, only if the employer can show it made a good-faith effort to comply.
In order to determine good faith, the IRS will consider whether the employer made reasonable efforts to gather and transmit the requested data to an agent who would prepare it for submission to the IRS. The IRS will also look at whether the employer is taking appropriate steps to ensure future deadlines won’t be missed.