December 5, 2019
On December 2, 2019, the Treasury Department and the Internal Revenue Service (IRS) released Notice 2019-63 relating to information reporting required under the Affordable Care Act for 2019. The notice provides guidance on three important issues:
The new enforcement policy has limited usefulness to large employers, which are still required to distribute Form 1095-C to full-time employees. However, these employers may find the policy helpful if they also send information about self-insured coverage to employees who do not work full time (e.g., retirees).
The Affordable Care Act created new reporting requirements related to enforcement of the individual shared responsibility penalty, the employer shared responsibility penalty and the premium assistance tax credits (available to certain individuals when purchasing coverage through the federal Marketplace/state Exchanges).
When implementing these reporting requirements, large employers generally follow the following processes:
New Relief for 2019
Treasury and IRS acknowledge in the notice that Congress reduced the Affordable Care Act’s individual shared responsible penalty to zero effective January 1, 2019.1 This means that individuals do not need to receive a Form 1095-B documenting their enrollment in coverage for 2019. Nonetheless, since Congress did not change the reporting rules, reporting entities are still required to comply with the reporting laws.
Notice 2019-63 states that the IRS will not impose a penalty if a coverage provider fails to distribute Form 1095-B to plan participants when the following two conditions are met:
This relief only applies to the Form 1095-B, not to Form 1095-C. However, if a large employer uses the Form 1095-C to report coverage of an individual who is not a full-time employee for any month of 2019, the enforcement relief would apply.
This relief does not affect the requirement to file these forms with the IRS by the required deadline, which means that reporting entities will still need to complete and file all required forms. The deadline for filing these forms is February 28, 2020 (if filing on paper) or March 31, 2020 (if filing electronically, which is required when filing 250 or more forms of either type).
The notice continues two types of relief provided in prior years:
As noted above, there is no change in the deadlines for filing forms with the IRS.
Final 2019 Forms Not Released Yet
The IRS has released draft reporting forms and instructions for the 1095-B, 1095-C, 1094-B and 1094-C, but has not yet released the final versions of these forms. Final forms should be posted on the IRS website soon. The draft forms are the same as the 2018 forms and the draft instructions indicate no change in the way reporting entities complete the forms for 2019.
Implications for Reporting Entities
Reporting entities should do the following:
2 The “responsible individual” is generally the plan participant (i.e., the employee or former employee), but the term would also include a family member who gets coverage independently (such as a former spouse getting continuation coverage through COBRA).
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