IRS Extends Forms 1095-B/C Reporting Deadline and Good Faith Effort Relief
On Nov. 28, 2018, in a piece of unexpected and good news, the IRS published Notice 2018-94. This notice extends the due date for providing Forms 1095-B and 1095-C to individuals and employees and extends the good faith effort relief from penalties for mistakes on Forms 1094-B, 1095-B, 1094-C and 1095-C.
On the due date extension, the notice extends the due date for providing the 2018 Forms 1095-B and 1095-C to applicable individuals from Jan. 31, 2019, to March 4, 2019. Importantly, the notice does not extend the due date for filing 2018 Forms 1094-B, 1095-B, 1094-C or 1095-C with the IRS. Thus, employers should still plan to file the appropriate forms by Feb. 28, 2019 (if filing by paper) or April 1, 2019 (if filing electronically). The notice also states that because the automatic extension of the due date to furnish is as generous as the permissive 30-day extension to provide notices to individuals/employees, the IRS will not formally respond to any request for such an extension.
Impact on Employers
On the good faith effort relief, the notice extends relief from past years to the 2018 forms. Specifically, the good faith effort relief means that employers who work in good faith to complete the forms will not be assessed penalties relating to inaccurate or missing information. For example, if an employer timely files a Form 1094-C and related Forms 1095-C and has made a good faith effort to complete the forms correctly, but makes some mistakes on employee information, social security numbers, birth dates or reporting codes (on Lines 14, 15 and 16), the IRS will not assess reporting penalties. (Employers should remember that reporting penalties are distinct from employer mandate penalties for not offering affordable coverage to full time employees.) In determining good faith efforts, the IRS will consider multiple factors, including whether the employer made appropriate efforts to gather and transmit necessary data to a vendor or agent to submit to the IRS.
Lastly, the notice states that the IRS is reviewing whether the repeal of the individual mandate tax penalty (which takes effect in 2019) will change the reporting requirements under IRC Section 6055 for self-insured employers and other coverage providers (such as an insurer of a fully insured plan) to report on all covered individuals under the plan on either Form 1095-B or 1095-C. NFP Benefits Compliance will continue to monitor any developments that might impact employer reporting obligations in future years.
Should you have questions regarding employer reporting or employer mandate obligations, please reach out to your ShawHankins team.