In a belated Christmas gift to employers, on December 28 the IRS extended the deadlines to distribute and file the 2015 Forms 1094C/1095C (required for all Applicable Large Employers) and Forms 1094B/1095B (required for insurance companies, union plans and small employers who offer a self-funded health plan).
- The deadline for distributing Form 1095B and 1095C to employees is March 31, 2016.
- The deadline for filing Forms 1094B/1095B and 1094C/1095C with the IRS is May 31, 2016.
These extensions are automatic and more generous than the extensions available under existing procedures. Employers who have already filed for an extension will not receive a formal response from the IRS but can take advantage of the automatic extended deadlines. The IRS was also clear they would not grant any further extensions but would take into account whether the employer made reasonable efforts to prepare for the Affordable Care Act (ACA) reporting requirements for 2015 and the extent to which the employer is making efforts to comply in a timely manner with the reporting requirements for 2016 when assessing any late filing penalties.
The IRS is encouraging employers to comply with the original deadlines whenever possible. But these extensions should provide some much needed breathing room for the many employers and their reporting vendors who were struggling with meeting the original deadlines.
Keep in mind your employees may be looking for the information contained in Form 1095B and/or 1095C in order to file their own taxes. Employers who know they will not meet the original February 1, 2016 distribution deadline (or who are aware their insurance company will not meet that deadline) should strongly consider notifying employees in advance not to expect the form(s) until later in the year.
The IRS notice extending the distribution deadline specifically authorizes employees to file their taxes even if they have not yet received their 1095s, relying on any other source information they may have from their employer or insurance company (e.g. rate sheets showing the cost of enrolling in the employer’s health plan, insurance enrollment cards for employees and their family members, etc.). Employees will not need to file an amended return when they eventually receive their 1095s.
Finally, employers using an ACA reporting vendor should look for information from the vendor on how they intend to handle these extended deadlines and what steps they may require to notify them that the employer intends to take advantage of the extended deadlines.