On Nov. 29, the IRS extended the original Jan. 31, 2019, deadline for employers to distribute 2018 Forms 1095-C or 1095-B to employees. They now have until March 4, 2019, to get employees those forms.
By filing Forms 1095-C with the IRS and providing employees with copies, employers with 50 or more full-time or equivalent employees show they offered eligible employees health coverage that was compliant with the Affordable Care Act (ACA). For smaller organizations, self-insured employers or insurance companies file and distribute Forms 1095-B.
The relief was communicated in IRS Notice 2018-94. The IRS has extended the Jan. 31 deadline for distributing ACA information-reporting forms for the past two years.
“In language identical to the extension from the last two years, the IRS states the reason for the extension is because they ‘have determined that a substantial number of employers, insurers, and other providers of minimum essential coverage need additional time beyond the Jan. 31, 2019, due date to gather and analyze the information and prepare the 2018 Forms 1095-B and 1095-C,’ ” explained Brian Gilmore, lead benefits counsel and vice president at ABD Insurance and Financial Services in San Mateo, Calif.
As in the last two years, he added, there was no extension to the standard deadline for employers to file copies of Forms 1095-B and 1095-C (and transmital Forms 1094-B and 1094-C) with the IRS “because they again found ‘no similar need,’ ” Gilmore noted.
Recently, the IRS published final forms and instructions to help employers prepare for next year’s reporting on the health coverage they offered employees in 2018.
The critical 2019 filing deadlines for forms that detail 2018 coverage are now as follows:
|Paper filing with IRS||Feb. 28|
|1095 forms delivered to employees||March 4 (extended from Jan. 31)|
|Electronic filing with IRS||April 1|
Employers that file 250 or more information returns with the IRS must file the returns electronically.
“Employers should not count on any additional extensions and should work diligently to complete their reporting forms on time,” said Danielle Capilla, director of employee benefits compliance at Alera Group, an insurance and financial services firm.
Many employers may prefer to distribute the 1095 forms by Jan. 31 alongside the W-2 tax forms, which are due to employees by that date.
“Employers that are ready to go by the original deadline should not hesitate to go ahead,” advised Capilla.
A Hard Deadline
The deadline relief is automatic and does not depend on an employer or insurer requesting it. But “as a result of this automatic 30-day extension, the 30-day extension that would normally be available on a showing of good cause is not available,” said Ethan McWilliams, senior compliance analyst at Lockton, a benefits brokerage and consultancy based in Kansas City, Mo. “That is, the March 4 deadline is a hard deadline.”
Again, there is no extension to the deadline to file 1095 forms with the IRS. These are still due by Feb. 28, 2019, for employers filing on paper and by April 1, 2019, for employers filing electronically. Employers filing at least 250 Forms 1095-C with the IRS must do so electronically unless they obtain a waiver.
Employers may obtain a guaranteed 30-day extension on the deadlines for filing with the IRS by submitting Form 8809 on or before those deadlines.
In addition, the IRS said it will continue to apply to 2018 filings the same “good-faith” approach to employer ACA filings that applied to filings for the 2015, 2016 and 2017 calendar years. “This relief applies only to incorrect and incomplete information reported on Form 1095-C or 1095-B, and not to a failure to timely furnish or file the forms, although the IRS may excuse penalties for failing to furnish or file upon a showing of reasonable cause,” McWilliams said.
Employees Filing Taxes Early
“Come tax day 2019, employees must show whether they or their family members had minimum essential coverage on Line 61 of their individual tax returns,” said John Duval, president and CEO of Fuse Workforce Management, a compliance software firm. “Form 1095-C helps employees complete their individual tax returns by providing important information regarding their health coverage for the previous calendar year.”
However, said Greta Cowart, an attorney at law firm Winstead in Dallas, “some employees may be ready to file their federal income tax returns before they receive their Form 1095-C or 1095-B. [So] the IRS indicated that they may file their income tax returns without the forms” by relying on statements or other information from their employer or insurance carrier indicating that they received ACA-compliant health coverage in 2018.
Changes for Future Years
The Tax Cuts and Jobs Act effectively repealed the mandate that individuals must have health coverage that meets the ACA’s minimum standards for health insurance or pay a tax penalty. The repeal takes effect in 2019. The IRS is now studying whether employees must receive forms showing they had ACA-compliant coverage when filing future tax returns, Gilmore said, adding, “It is not clear what purposes that portion of the ACA reporting requirements would serve after repeal of the individual mandate.”