Benefits

IRS Provides Some Extra Relief for Employers

By Andie Burjek

Nov. 22, 2016

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Form 1095-C

The IRS has granted another deadline extension for furnishing Affordable Care Act forms. All applicable employers with more than 50 full-time employees now have until March 2, 2017, to distribute the Form 1095-C, as well as Form 1095-B, to their employees, an extension from Jan. 31, 2017.

The purpose of the Form 1095-C, the Employer-Provided Health Insurance Offer and Coverage, is to address the employer mandate in the ACA, explained Janice Krueger, a subject matter expert at Greatland Corp., a W-2 and 1099 specialist which provides solutions for small to mid-sized businesses and accountants. On this form, employers report the offer made to the employee.

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Janice Krueger

One reason the IRS extended this deadline is that employers have a lot going on in January, she added — especially January 2017. The IRS has moved up the due date to file W-2s for tax year 2016 and the 1099-MISC (miscellaneous) form to Jan. 31, 2017. It would be a burden on employers to deal with these two deadlines along with the original 1095-C deadline, Krueger said.

“They [the IRS] were reflective of last year, how complicated the process was and the struggles employers had,” said Arthur Tacchino, chief innovation officer of SyncStream Solutions, an ACA reporting and compliance solution provider. Tacchino speculated that as this reporting cycle approached, the IRS got feedback from employers and stakeholders who are part of the process, and it became more apparent how complicated the process is and how new it still is for a lot of employers. This is an “enormous relief from the employer’s perspective.”

A common misconception, he added, is that this extension is related to President-elect Donald Trump, who has said that he wants to “repeal and replace” the Affordable Care Act. “The key thing for employers to remember is, you still have a compliance obligation here, and while there’s relief being granted, it doesn’t alleviate your obligation all together,” said Tacchino.

As part of the “good faith efforts” standard, an employer will not face fines or penalties if they make a mistake in calculating or reporting, so long as they can show they put in the effort and reached the deadline. That being said, if an employer were to assume that the health care landscape will change soon and that ACA compliance won’t be relevant by the extended deadline, that would be a big mistake, Tacchino said. They would need to pay a penalty in that situation.

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Arthur Tacchino

The appeal of the extension is that it does provide employers with more time and relief to meet their obligations, but Krueger recommended that filers still try to conform to the original due date if possible.
“Don’t procrastinate just because the deadline has been extended,” she said.

Also important to note, she added, is that although the IRS has granted an automatic extension for distributing these 1095 forms to employees, they did not extend the deadline to file the same forms to the IRS. Those due dates still hold at February 28, 2017 (if filing by paper) or March 31, 2017 (if filing
electronically).

[Related article: ACA Deadline Looms: Insurance Data Transmittal to IRS Due]

Web: Andie Burjek is a Workforce associate editorComment below, or email at aburjek@humancapitalmedia.com. Follow Workforce on Twitter at @workforcenews.

 

Andie Burjek is an associate editor at Workforce.com.

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