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IRS announces relief on some ACA reporting requirements

Updated: May 9, 2023

The IRS recently announced limited relief from some of the 2019 ACA reporting requirements (IRC Sections 6055 and 6056). Specifically, the relief has to do with the 1095-B and 1095-C forms, which relate to reporting individuals’ coverage.

Here are the changes employers need to be aware of:

First, the good faith penalty relief was extended for 2019. This means that no penalties will be assessed on employers that report incorrect or incomplete information on their ACA reporting, as long as they can show a good faith effort was made to comply with the requirements. However, penalty relief isn’t available if the employer misses a deadline or fails to file, and doesn’t apply to any employer mandate penalties.

Second, the deadline for distributing 1095-B and C forms to employees was extended from January 31 to March 2, 2020. This gives employers an extra 30 days to issue 1095 forms to employees.

The deadlines for filing ACA reports with the IRS, however, will remain the same. As a reminder, paper filings are due to the IRS by February 28, 2020 and electronic filings are due as of March 31, 2020. Filers can apply for an extension with the IRS.

Third, because the individual mandate penalty was reduced to $0 starting in 2019, individuals no longer need enrollment information on the 1095-B to file their federal tax return. As a result, the IRS will not assess penalties against employers or coverage providers that fail to distribute 1095-B forms, as long as a 1095-B is provided within 30 days of an individual’s request. However, employers are still required to file either the B or C forms with the IRS, and others may have to contend with state-specific health care reporting requirements. Entities must post a prominent notice on their website with information about how to request a copy of their 1095-B.

Lastly, applicable large employers that sponsor self-insured plans must still report enrollment information for full-time employees and dependents on Part III of the 1095-C.

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