In a surprise move, on November 18, 2016 the Internal Revenue Service (the IRS) published Notice 2016-70 (the Notice), which extends the due date for certain 2016 information-reporting requirements under the Patient Protection and Affordable Care Act (the ACA). Specifically, the Notice extends the due date for furnishing to individuals the 2016 Form 1095-B (Health Coverage) and the 2016 Form 1095-C (Employer-Provided Health Insurance Offer and Coverage) from January 31, 2017 to March 2, 2017. The Notice also extends good-faith transition relief from certain penalties.
Background
Section 6055 of the Internal Revenue Code (the Code) generally requires health insurance issuers, self-insuring employers, government agencies and other providers of minimum essential coverage to file and furnish annual information returns and statements regarding the coverage provided. Code Section 6056 generally requires applicable large employers (generally those with 50 or more full-time employees or equivalents) to file with the IRS and furnish to individuals annual information returns and statements relating to the health insurance, if any, the employer offers to its full-time employees.
Failure to timely or accurately file and furnish the appropriate information statements and returns can result in certain penalties. Regulations provided relief from penalties for entities reporting in 2016 that could show they made good-faith efforts to comply with the information-reporting requirements.
Extended Deadlines
The IRS determined employers, insurers and other providers of minimum essential coverage may need additional time to gather and analyze the information and prepare the 2016 Forms 1095-B and 1095-C to be furnished to individuals. Accordingly, the Notice extends the due date for furnishing the 2016 Form 1095-B and the 2016 Form 1095-C from January 31, 2017 to March 2, 2017.
The Notice does not extend the due date for filing with the IRS the 2016 Forms 1094-B, 1095-B, 1094-C or 1095-C. As such, the deadline remains February 28, 2017 if not filing electronically, or March 31, 2017 if filing electronically.
Extended Penalty Relief
The Notice also extends good-faith transition relief from certain penalties. This relief applies to reporting entities that can show they made good-faith efforts to comply with the ACA’s information-reporting requirements if the various forms or statements have incorrect or incomplete information. The penalty relief applies to missing and inaccurate taxpayer identification numbers and dates of birth, as well as other information required on the return or statement. No penalty relief is provided in the case of reporting entities that do not make a good-faith effort to comply with the regulations or that fail to file an information return or furnish a statement by the due date. The IRS will look at various factors to determine an entity’s good-faith efforts, including whether the 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.
Future Years
The IRS does not anticipate extending this transition relief—either with respect to the due dates or with respect to good-faith relief from certain penalties—to reporting for 2017.
Additional Information
If you have any questions regarding the information reporting rules under the ACA, please contact your Kutak Rock LLP attorney or a member of the Kutak Rock Employee Benefits Practice Group listed below.