United States: IRS Issues Final Regulations Regarding Form 1095 ACA Reporting Requirements

The IRS recently issued final regulations (the "Final Rule") providing an automatic 30-day extension of the January 31 deadline for providing Forms 1095-B and 1095-C to individuals. Consistent with the proposed regulations issued last year, the Final Rule does not extend the February 28 (March 31 if filed electronically) deadline to file Forms 1094-B, 1095-B, 1094-C, and 1095-C with the IRS.

In addition, the Final Rule provides an alternative method for reporting entities to timely furnish Forms 1095-B to individuals. The reporting entity must post a clear and conspicuous notice on the entity's website stating that individuals may receive a copy of their Form 1095-B upon request. This notice must include an email address and a physical address to which a request may be directed, as well as a telephone number that individuals may use for assistance with any questions. The notice must be retained on the entity's website until October 15 of the year following the calendar year to which it relates. The reporting entity must provide a Form 1095-B to an individual within 30 days of the date of receipt of the request. The alternative method of furnishing applies only to taxable years when the individual shared responsibility payment amount is zero. This alternative method of furnishing an employee the information provided on Form 1095-B may also be available to self-funded employers who are Applicable Large Employers with non-employees or part-time employees enrolled in their group health plans that normally report the offer of minimum essential coverage on Form 1095-C. Notably, the Final Rule does not relieve Applicable Large Employers from furnishing Forms 1095-C (Part I and II) to full-time employees.

Finally, the Final Rule confirms the elimination of the good-faith transitional relief from penalties that applied for incorrect or incomplete information on Forms that are furnished to individuals or filed with the IRS for calendar years after 2020. Going forward, reporting entities will have to show that the failure to file or furnish correct and complete Forms was due to reasonable cause and not willful neglect.

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