Recently, the IRS issued Notice 2020-76, which extends the filing deadline to March 2, 2021, for furnishing Form 1095-B and 1095-C to recipients/employees.
What are forms 1095-B and 1095-C?
Form 1095-B is a form used by providers of Minimum Essential Coverage (MEC) to report which months employees and/or recipients have coverage. These providers include small employers with self-funded plans.
Form 1095-C is a form applicable large employers (ALE) need to give to their full-time employees if they have a fully insured plan. If the large employer has a self-insured plan, the ALE needs to give both full-time employees and part-time employees and/or other recipients that enroll in their coverage a form. If the ALE has a fully insured plan, they will fill out parts one and two of 1095-C. If the AEL has a self-funded plan, they will also fill out part 3 of the 1095-C.
IRS Filing Date Unchanged
The original filing dates to submit the forms to the IRS remain unaffected. Entities that paper file the forms with the IRS need to mail the forms by March 1, 2021. Entities with 250+ forms are required to electronically file the forms to the IRS by March 31, 2021.
Compliance with Code Section 6055
For the second year now, health insurance issuers that are required to report under code section 6055 have additional relief for filing the forms with recipients. In lieu of sending out Form 1095-B to all recipients, issuers can post a notice on their website that individuals can obtain a copy of their 1095-B form if they request it. The notice needs to include an email and physical address where this request can be sent as well as a phone number to call if the individual has any questions. Once the form request is received, the health insurance issuer has up to 30 days to issue Form 1095-B to the requesting individual.
The relief available under code section 6055 also applies to ALEs that report information on part 3 of Form 1095-C for employees/recipients that are not full-time. This reporting relief does not extend to any full-time employees of the ALE.
Good Faith Relief Extended
Lastly, Notice 2020-76 also extends the good-faith relief, which gives entities relief from penalties under sections 6721 and 6722 if a good-faith effort is made in preparing and submitting the ACA forms. It’s important to note that Notice 2020-76 specifically states that this will be the last year of this good-faith effort reporting relief.
Make Sure You’re in Compliance with ACA Guidelines
There are many forms individuals and businesses need to consider as they work to comply with the Affordable Care Act. Receiving and completing the appropriate form at the right time is key. Items like 1095-B and 1095-C form filing and distribution are critical to compliance.