Big changes are happening in the realm of workplace compliance issues and labor laws in the United States. Noncompliance with government regulations can have serious consequences—and can cost your business big time. Keep up with what's happening between the government and the workplace with the HR Compliance Tracker: your go-to place to stay updated on some major workforce compliance issues.
IRS extends deadlines for Form 1095-C & transition relief
At the end of the month, the IRS issued a notice saying it would extend the deadline for furnishing Form 1095-C to employees. After consulting with stakeholders, the IRS determined that employers, insurers, and other providers of Minimum Essential Coverage (MEC) will need an extended period of time to gather and analyze the necessary information to prepare Forms 1095-B and 1095-C. The deadline has been extended from January 31, 2019, to March 4, 2019.
This IRS notice also extended the good-faith transition relief through the 2018 tax year from section 6721 and 6722 penalties to the 2018 information reporting requirements under sections 6055 and 6056. Remember, good-faith transition relief can be applied only when reasonable efforts to maintain ACA compliance and meet ACA reporting deadlines have been demonstrated.
IRS issues the next step of the ACA penalty process
In effort to enforce full-time employee coverage requirements under the Affordable Care Act (ACA), the IRS began assessing excise tax penalties against Applicable Large Employers (ALEs) that didn’t comply in 2015. For those who failed to comply, the IRS sent Letter 226-J to alert companies that the IRS determined an employer shared responsibility payment (ESRP) was owed.
To put it more simply: if you were suspected for a violation with the employer mandate of the ACA, you might’ve received a letter telling you how much money you owe. It’s up to you to respond with an appeal by the deadline (a 30-day period) or pay the fine.
Now, the IRS will send out one of the five versions of Letter 227 in response to companies who answered:
- Letter 227-J is used if the ALE agreed to the proposed ESRP liability in its response to the Letter 226-J. No further action is required, besides paying the ESRP liability bill.
- Letter 227-K is used if the ALE provided additional information in response to Letter 226-J to inform that it should not owe an ESRP payment.
- Letter 227-L is used if the ALE provided additional information in response to Letter 226-J and the IRS responds in with its proposed assessment. The ALE can agree with the assessment or request an appeal.
- Letter 227-M is similar to Letter 227-L, but the IRS didn’t revise its proposed assessment.
- Letter 227-N is used to inform the ALE of the IRS’s decision following an appeals discussion. No further action is required, besides paying the ESRP liability bill.
IRS Extends Form 1095-C Deadline for 2018 ACA Reporting
The IRS extended deadlines for furnishing ACA Forms 1095-B and 1095-C to employees. Previously due on Wednesday, January 31, 2018, the automatic extension gives employers an extra 30 days to give employees their 1095-C forms, now due on Friday, March 2, 2018.
There are a few things to note about this extension:
- This is an automatic extension that applies to everyone. No application is necessary.
- No other extensions will be available for Form 1095-C (you will not be able to file Form 8809 for an additional extension).
- Due to the extension, employees may not receive their Form 1095-C by the time they file their individual tax returns. While the information on this form may be helpful for preparing a tax return, it is not required to file.
- The IRS still encourages employers to furnish Form 1095-C to their employees as soon as possible.
Please, note that the Form 1094-C deadline remains the same. For more information, visit our ACA reporting forms FAQs.
The IRS issues penalty notices for ACA Employer Shared Responsibility Mandate
Several months ago, the IRS said it would begin issuing penalties for employers who did not comply with the Employer Shared Responsibility Mandate under the Affordable Care Act. Now, the IRS is making good on its promise. The IRS has started mailing notices of potential liability to employers. Under section 4980H of the ACA, Applicable Large Employers (ALEs) must offer health plans with Minimum Value Coverage to full-time equivalent employees and their dependents. ALEs who fail to report offers of coverage are subject to penalty.
Employers who receive notices of penalties for the 2015 reporting year have the opportunity to appeal before the IRS requests payment. Employers also have the option to request an extension within 30 days of receiving the notice from the IRS. If employers are unsure of ACA compliance status for the 2015 reporting year, they should monitor the mail for a notice and be prepared to act swiftly upon receipt.