Happy Holidays from the IRS: Extended Deadline for Furnishing (But Not Filing) 2019 ACA Form 1095-B and Form 1095-C
December 2019 Simplify Compliance Benefits Bulletin
On December 2, 2019, the IRS issued Notice 2019-63, which extends the due date for certain Affordable Care Act (ACA) information reporting requirements for insurers, self-insured plan sponsors, and “applicable large employers.” Specifically, the IRS is extending the deadline for furnishing 2019 Form 1095-B and 2019 Form 1095-C to individuals by 30 days—from January 31, 2020 to March 2, 2020.
Notice 2019-63 does not, however, extend the deadline for filing the 2019 forms with the IRS. The IRS filing deadline remains March 31, 2020 if filing electronically (or February 28, 2020 if filing by paper).
Despite the extension, the IRS is encouraging reporting entities to furnish Form 1095-B and 1095-C statements as soon as they are able.
“Good Faith” Compliance Standard Extended to 2019
In addition to extending the due date for furnishing forms to individuals, Notice 2019-63 also extends the “good faith” transition relief from penalties to 2019 reporting. Under the transition relief, employers and other reporting entities will not be penalized for providing incorrect or incomplete information on the 2019 forms if they can demonstrate that they have made good faith efforts to comply with the reporting requirements.
In determining whether a reporting entity reported in “good faith,” the IRS will take into account whether the reporting entity made reasonable efforts to prepare for reporting (such as gathering and transmitting the necessary data to an agent to prepare the data for submission to the IRS, or testing its ability to transmit to the IRS). The IRS will also take into account whether the reporting entity is taking steps to ensure that it will be able to comply with the reporting requirements for 2020.
Impact on Individual Taxpayers
The IRS recognizes that taxpayers may not receive their Form 1095-B or Form 1095-C by the time they are ready to file their 2019 income tax returns due to the deadline extension. Like last year, taxpayers do not need to wait to receive their Form 1095-B and/or 1095-C in order to file their tax returns.
Even though the individual mandate penalty was reduced to $0 in 2019, taxpayers will need to attest on their tax returns as to whether they were eligible for a Marketplace subsidy. Instead of waiting for the Form 1095-B or form 1095-C, they may rely on other information received from their employer. They do not need to send their Form 1095-B, 1095-C or any information they relied upon in completing their 2019 tax return to the IRS, but should keep that information with their tax records.
States with an individual mandate (i.e., Massachusetts – 2006, New Jersey – 2019 and California – 2020) remain in effect despite the elimination of the ACA’s individual mandate.
2019 Section 6055 Furnishing Requirement Relief for Carriers
This Notice creates relief for insurance carriers who provide the Form 1095-B. The IRS will not assess penalties for an insurance carrier’s failure to furnish Form 1095-B to individuals if the insurance carrier (1) posts a notice prominently on its website state that responsible individuals may receive a copy of their 2019 Form 1095-B upon request, accompanied by contact information to make the request, and (2) the insurance carrier must furnish a 2019 Form 1095-B to any responsible individual upon request within 30 days of the date the request is received.
This relief is only available to insurance carriers and does not affect the reporting requirements of employers who sponsor a self-insured medical plan that only covers “full-time” employees defined by the ACA. However, if the employer also covers “part-time” employees on their self-insured medical plan, they can use the relief described above for their part-time employees (instead of issuing a 1095-C form to these employees, they could use the simplified posting method). This simplified method may provide limited relief, however, because the employer still needs to furnish 1095-C forms for all employees to the IRS.
The extension relates to 2019 reporting only. The IRS does not anticipate extending deadlines or good-faith transition relief to 2020.
- Transition Relief Related to Health Coverage Reporting Required by I.R.C. Sections 6055 and 6056 for 2019: Notice 2019-63 – Internal Revenue Service
This Benefits Bulletin is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.