The Treasury Department and the Internal Revenue Service (IRS) issued IRS Notice 2016-70, which provides a 30-day extension (to March 2, 2017) for furnishing 2016 information statements under the Affordable Care Act (ACA) to individuals, and extends good-faith transition relief from penalties. It does not extend the due date for filing information returns with the IRS.
The ACA added sections 6055 and 6056 to the Internal Revenue Code (Code), which require health coverage providers (i.e., insurers and self-insured plans) and "applicable large employers"1 to report to employees and to the IRS if health coverage was offered and if the employee had coverage. The IRS issued final regulations in 2014 that set forth deadlines for filing that information and issued Forms 1094-B, 1094-C, 1095-B, and 1095-C to report this required information. The 1094 forms are provided to the IRS only, while the 1095 forms (employee statements) are provided to both employees and the IRS.
Large employers/plans or their administrator (large employers must send regardless if insured or self-funded)
- Form 1095-C to individuals
- Form 1094-C (with copies of the 1095-C forms attached) to the IRS
Insurers and self-insured small employers/plans
- Form 1095-B to individuals
- Form 1094-B (with copies of the 1095-B forms attached) to the IRS
Non-compliance with the applicable due dates will result in penalties under Code sections 6721 or 6722 for failure to timely furnish or file, i.e., up to $260 per participant capped annually at $3,178,500.
Summary of Notice 2016-70
Action Needed Now: In order to meet the deadlines, employers and insurers should continue to gather the required data, prepare returns, and run tests on their systems for the electronic transfer of information to the IRS.
Cheiron Observation: The extended deadline for furnishing the individual statements is particularly useful to employers and insurers for gathering December data, however it does not relieve employers and insurers from the requirement to engage in good-faith compliance with the reporting requirements under sections 6055 and 6056.
Cheiron consultants can assist you with your ACA reporting obligations.
Cheiron is an actuarial consulting firm that provides actuarial and consulting advice. However, we are neither attorneys nor accountants. Accordingly, we do not provide legal services or tax advice.
1 Generally, "applicable large employers" are employers with 50 or more full-time employees (including full-time equivalent employees).