ACA Draft Instructions, Filing Extensions

The Affordable Care Act (ACA) created new reporting requirements under Internal Revenue Code Sections 6055 and 6056. Under these new reporting rules, certain employers must provide information to the IRS about the health plan coverage they offer or do not offer or provide to their employees. Reporting is first required in 2016, related to coverage offered or provided in 2015.

The 2015 draft Forms 1094-B, 1095-B, 1094-C and 1095-C were previously released in June.  The Internal Revenue Service (IRS) recently released the following draft instructions:

• 2015 draft instructions for Form 1094-B and 1095-B: Used by entities reporting under Section 6055, including sponsors of self-insured group health plans that are not reporting as applicable large employers (ALEs).
• 2015 draft instructions for Form 1094-C and 1095-C: Used by ALEs that are reporting under Section 6056, as well as for combined reporting by ALEs who sponsor self-insured plans that are required to report under both Sections 6055 and 6056.

Except for a few minor changes and a number of clarifications, the 2015 draft forms and instructions are largely unchanged from the 2014 versions. One change was addressed in the 2015 draft instructions, as the 2015 draft Form 1095-C includes an additional field, titled “Plan Start Month.” This new field is optional for 2015, but will be required for 2016 and beyond.

Please remember these 2015 forms and instructions are draft versions only and should not be filed with the IRS or relied upon for filing. The IRS may make changes prior to releasing final 2015 versions.

Proposed Filing Extensions & Waivers

Although the changes made in the 2015 draft instructions were mostly clarifications of existing requirements, they did include new proposed filing extensions and a proposed waiver from the requirement to file electronically.  Below are brief summaries of the proposed changes.

Filing Extensions Reporting entities can get an automatic 30-day extension of time to file by completing and filing Form 8809, Application for Extension of Time To File Information Returns, by the due date of the returns. The form may be submitted on paper or electronically through the FIRE System. No signature or explanation is required for the extension.

Under certain hardship conditions, reporting entities may apply for an additional 30-day extension. See the instructions for Form 8809 for more information.

Electronic Reporting Waiver To receive a waiver from the requirement to file returns electronically, reporting entities must submit Form 8508, Request for Waiver From Filing Information Returns Electronically, at least 45 days before the due date of the returns.

Without an approved waiver, a reporting entity that is required to file electronically but fails to do so may be subject to a penalty of up to $250 per return, unless it can establish reasonable cause. However, reporting entities can file up to 250 returns on paper; those returns will not be subject to a penalty for failure to file electronically.

This blog is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.