The IRS has issued the final 2020 forms 1094-B, 1095-B, 1094-C, and 1095-C along with instructions. These forms are used by employers, plan sponsors, and group health plan insurers to report coverage to plan members and the IRS. This reporting is required by the Affordable Care Act. The deadline to provide notice to individuals on 1095-B or 1095-C has been extended from January 31, 2021, to March 2, 2021. Also, the IRS has issued transitional good-faith relief from section 6721 and 6722 penalties to the 2020 information reporting requirements under sections 6055 and 6056.
A provision of the Patient Protection and Affordable Care Act (Health Care Reform) requires that all providers of Minimum Essential Coverage (MEC) and Applicable Large Employers (ALEs) provide reporting to individuals as well as the IRS showing when health coverage was in place. The Tax Cuts and Jobs Act eliminates the individual mandate penalty effective with plan years after 12/31/18. However, ACA reporting continues to be required.
The IRS released Notice 2020-76 which provides an extension of up to 30-days for ALEs to distribute the 2020 Affordable Care Act (ACA) reporting forms to employees and covered individuals. These Forms must now be provided to individuals by March 2, 2021, instead of January 31, 2021. The IRS also confirms that additional 30-day extensions will not be granted.
Due to the individual shared responsibility payment having been reduced to zero for months beginning after December 31, 2018, individuals no longer need the information on Form 1095-B. As a result, the Treasury Department and the Internal Revenue Service have determined that for 2020, relief is available from the penalty under section 6722 for failure to furnish Form 1095-B under certain conditions.
The extended deadline applies only to distributing the 2020 ACA reporting forms to employees and covered individuals. Notice 2020-76 does not extend the deadlines for ALEs to file the 2020 ACA reporting forms with the IRS. ALEs filing less than 250 returns may file in paper.
The deadline for paper filing is February 28, 2021. ALEs filing 250 or more returns must file electronically through the IRS’s AIR system. The deadline for electronic filing is March 31, 2021.
For fully-insured group health plans, the insurance carrier is responsible for furnishing the Forms 1095-B to the IRS and employees, and the employer is responsible for furnishing Forms 1095-C to the IRS.
For self-funded & (level-funded group health plans regardless of size), the employer/sponsor is responsible for issuing and filing both Forms 1095-B and 1095-C.
EBI clients that utilize Employee Navigator as their benefits and enrollment portal can file the 1095-B and 1095-C forms directly through the site. Employee Navigator partners with a TPA, Nelco, that formerly files the forms with the IRS and has additional options to mail the forms to your employees for a fee). Additional guidance will be forthcoming for Employee Navigator Clients.