The Affordable Care Act (ACA): What’s Changed :: Wamhoff Financial & Accounting

The Affordable Care Act (ACA): What’s Changed

IRS Extends Due Date for Providers and Employers to Issue Health Coverage Forms to Individuals

On November 18, 2016, under Notice 2016-70, the IRS extended the 2017 due date for providing 2016 healthcare coverage information forms to individuals. Insurers, self-insuring employers, other coverage providers and applicable large employers now have until March 2, 2017 to provide Form 1095-B (Health Coverage by Providers) or Form 1095-C (Employer-Provided Health Coverage) to individuals, whichever applies. This is a 30-day extension from the original due date of January 31, 2017.

The due dates for filing 2016 forms by providers to IRS are February 28, 2017 for paper filers and March 31, 2017 for electronic filers.

Due to these extensions, individuals may not receive their Form 1095-B or Form 1095-C by the time they are ready to file their 2016 individual income tax return. While the information on these forms may assist in preparing a return, the forms are not required for filing. Taxpayers can prepare and file their returns using other information about their health insurance obtained directly from their provider, employer or other source. They don’t have to wait to receive their Form 1095-B or Form 1095-C to file.

Notice 2016-70 also extends transition relief from certain penalties, i.e., IRC Sections 6721 and 6722, to providers and employers that can show that they have in good faith made efforts to comply with the information-reporting requirements for 2016, for any incorrect or incomplete information reported on any return or statement. This Notice also provides guidance to individuals who might not receive their Form 1095-B or Form 1095-C by the time they file their 2016 individual income tax return, and as a result of these extensions, receive a penalty on their returns. It explains abating penalties for inadvertent errors and omissions where there was an effort to comply with the reporting requirements in good faith.

Even though these extensions have been granted, tax professionals are advising providers and employers to take note of the extensions, but to continue preparations as if the deadline had not been extended, in order to better ensure compliance and to avoid penalties. Higher penalties have been set for 2016.