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IRS Deadline Extension: ACA Forms 1095-C and 1095-B

IRS Deadline Extension: ACA Forms 1095-C and 1095-B


On December 22, 2017, the IRS announced that it is providing Applicable Large Employers (ALE’s) with an extension of the deadline for furnishing, to their full-time employees, Form 1095-C covering the calendar year 2017. The original deadline was January 31, 2018; the new deadline is March 2, 2018. ALE’s need not request the extension; it is automatic.

The IRS also announced that it is providing the same automatic extension for those small, self-insured employers who furnish Form 1095-B. This group of small employers isn’t subject to the employer shared responsibility provisions, but must furnish Form 1095-B to covered individuals so those individuals have evidence documenting their compliance with the individual mandate.

The IRS did not, however, provide an extension on another deadline for ALE’s: all Forms 1095-C and Form 1094-C must still be sent to the IRS by February 28, 2018 (if the ALE is filing by mail) or by April 2, 2018, if filing electronically.

Likewise, the IRS did not provide an extension for small, self-insured employers. All Forms 1095-B and 1094-B must still be sent to the IRS by February 28, 2018 (if the employer is filing by mail) or by April 2, 2018, if filing electronically.

Individual Mandate Penalty Eliminated
One provision in the massive new tax law signed by President Trump on December 22 will have a significant impact on the insurance market. The law eliminates the penalty if individuals are not insured. That was the big headline and many individuals are assuming that it is effective immediately, however the penalty is not eliminated until 2019. For 2018, individuals are still required to have minimum essential coverage and may be subject to a penalty if they do not have it.

How does the elimination of the individual mandate penalty impact employer-sponsored coverage?
Nothing in the tax law signed last month impacts employer-sponsored coverage directly. We’ve been asked by a few brokers if their Applicable Large Employer (ALE) clients must continue furnishing Forms 1095-C and 1095-B to their full-time employees and to the IRS. The answer is yes. Individuals and the IRS still need all forms from the employer to determine if the individual is qualified to receive the advanced premium tax credit through Covered California or any other federal or state-based exchange. All current employer reporting continues unchanged.

However, an indirect consequence of the 2019 elimination of the individual mandate penalty may be that participation in employer-sponsored plans may decline. Individuals who enrolled in a company plan in order to avoid the penalty may decide to drop coverage if their personal economic situation is such that they cannot afford to continue making their portion of the premium payment or even if they feel they are healthy enough to not need medical insurance. The congressional budget office estimates that, over the next decade, two to three million individuals will drop employer-sponsored coverage as a result of the penalty being eliminated.

Brokers and agents may want to incorporate the following into their client education and communications:

  1. Clear information about when the individual mandate penalty will really be eliminated – to reduce confusion and possible erroneous terminations of coverage.
  2. The outstanding value that employer-sponsored coverage provides – always useful communication as part of your long-term education process and to encourage employees not to drop coverage once the penalty is eliminated.
  3. Reinforcement that all ACA-related employer reporting is still required.

Resources
The Society For Human Resources Managers has published this helpful article explaining the possible effects on employers of the individual mandate penalty repeal.

Questions?
Contact the small group experts at 800.696.4543 or info@claremontcompanies.com.


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