Once again, it’s time for applicable large employers (ALEs) and employers who sponsor self-funded group health plans to prepare for reporting requirements under the Affordable Care Act (ACA). On November 13th, the IRS released draft 2019 forms and instructions:
Draft 1094-B Form (Transmittal to IRS for self-funded plan sponsors under 50)
Draft 1095-B Form (Statement to Individuals for self-funded plan sponsors under 50)
Draft 1094-C Form (Transmittal to IRS for Applicable Large Employers)
Draft 1095-C Form (Statement to Individuals for Applicable Large Employers)
For 2019, very little has changed from 2018. Despite the individual mandate penalty being reduced to $0, reporting continues to be required under Section 6055. That said, the draft instructions explain that Section 6055 reporting is still required to help the IRS administer premium tax credit eligibility, but any reference to the individual mandate penalty has been removed. In addition, the revised version of the Form 1095-C clarifies that the “Plan Start Month” box in Part II will remain optional for 2019. Previously, the IRS indicated that this box may have been mandatory for 2019 reporting.
However small the change though, it is still important to understand the changes to properly comply and avoid penalties. The draft instructions include the increased penalty amounts for 2019:
- For failure to file a correct information return, the penalty is $270 for each return for which the failure occurs, with the total penalty for a calendar year not to exceed $3,339,000.
- For failure to provide a correct payee statement, the penalty is $270 for each statement for which the failure occurs, with the total penalty for a calendar year not to exceed $3,339,000.
- Special rules apply that increase the per-statement and total penalties if there is intentional disregard of the requirement to file the returns and/or furnish the required statements.
Employers should become familiar with these forms for 2019 reporting but note that the draft forms are provided as a courtesy only and are not to be used or relied upon for filing. And, employers should be mindful that the IRS may make additional changes to these forms and instructions before releasing final 2019 versions. While many employers continue to hope that ACA reporting will go away, the requirements remain. As a reminder, reporting deadlines include:
- January 31, 2020 – Form 1095-C (or 1095-B if applicable) due to individuals
- February 28, 2020 – Forms 1094-C and 1095-C (or 1094-B and 1095-B if applicable) due to IRS if paper filing (only available for employers with fewer than 250 returns)
- March 31, 2020 – Forms 1094-C and 1095-C (or 1094-B and 1095-B if applicable) due to IRS if electronic filing
Please contact your HORAN representative with questions.