January 4, 2016

Treasury Extends Employer Reporting Requirements Under the Affordable Care Act

Contributor Michael D'Addio, Principal, Tax & Business

Related Service Tax & Business

Treasury Extends Employer Reporting Requirements Under the Affordable Care Act Tax & Business

The U.S. Department of the Treasury and the Internal Revenue Service have announced a limited extension of time for the filing of the 2015 information reporting requirements for employers and insurers under the Affordable Care Act (ACA). 2016 is the first year that employers and some insurers are required to report to employees, other covered individuals and the IRS certain information about health coverage for 2015.

Applicable Large Employers are required to issue information Forms 1095C to employees by February 1, 2016. These forms, along with Form 1094C, are required to be sent to IRS by February 29, 2016 if paper filed, or March 31, 2016 if electronically filed. Employers who self-fund their insurance must provide additional information on these forms.

Employers filing 250 or more of these forms are required to file electronically using the Affordable Care Act Information Reporting (AIR) System. This requires a significant amount of set-up and testing.

Employer groups and insurers have complained to Treasury about the difficulty of processing and filing the information by these dates. In particular, many companies offering processing services for these information returns have experienced a bottleneck and are at full capacity.

While IRS is prepared to accept these forms by their original due dates and encourages reporting to employees and insureds as soon as possible, a limited additional period of time is being provided for the filing of these forms. The notice extends by two months the February 1 due date for providing the information to employees. Additionally, the February 29 and March 31 deadlines for filing with IRS are extended three months.

The notice does not delay the applicability of the Affordable Care Act provisions to these companies nor does it eliminate the responsibility of employers and insurers to provide the required information.

If you have any questions, do not hesitate to contact your Marcum professional.