1095 Filing Timing and Relief
by Vita, on December 7, 2020
As the deadline approaches for the ACA required reporting of group health coverage offered in 2020, the IRS has issued IRS Notice 2020-76 regarding deadline extensions and requirements. This Notice provides parallel extensions and relief as has been offered in prior years.
History of Compliance Relief
In past years, the IRS provided relief to employers who made a good faith effort to comply with 1095-C and 1094-reporting requirements. The IRS provided relief that employers would not be subject to penalties for failure to correctly or completely file. This relief did not apply to employers that failed to timely file or furnish a statement, but it was a welcome relief to employers who made an honest effort to file the forms.
Good Faith Error Relief Again for 2020
Under the newly issued guidance, once again in 2020, no penalties will be imposed on employers that report incorrect or incomplete information (either on statements furnished to individuals or to the IRS) if a good faith effort at compliance was made. As in prior years, the relief is applied only when a good faith was made, not to any failure to timely furnish statements or file returns.
2020 is Last Year for Relief
The IRS also makes clear that 2020 is the final year the IRS intend to provide this good faith relief from penalties for incorrect or incomplete information returns.
Deadline for Furnishing Forms to Employees
The deadline for employers to furnish Form 1095-C to plan participants is now March 2, 2021. (The regular due date January 31). Due to this automatic extension, the permissive 30-day extension that the IRS may grant to an employer for good cause will not be available.
No Extension for Filing Forms with IRS
The IRS has not extended the deadline for employers to file Forms 1094-C and 1095-C with the IRS. Forms for calendar year 2020 must be filed by March 31, 2021 if filed electronically (or by March 1, 2021 if filed in paper form (because February 28 falls on a weekend). Employers may file Form 8809 to receive an automatic 30-day extension of this due date for forms due to the IRS.
A Different Process for 1095-B (Insurance Carrier Forms)
Because the individual shared responsibility payment has been reduced to $0 as of January 1, 2019, the IRS will not assess a penalty for failing to furnish Form 1095-B to individuals if two conditions are met:
- The reporting entity (insurance carrier) posts a notice prominently on its website stating that individuals may receive a copy of their 2020 Form 1095-B upon request (accompanied by an email address and a physical address to which a request may be sent), and
- A telephone number that individuals can use to contact the insurance carrier with any questions about the 1095 Forms.
The insurance carrier must then furnish a 2020 Form 1095-B within 30 days of the date the request is received.
Parallel Relief for Self-Funded Plans (for PT Employees)
This relief also applies to employers that are required to furnish Form 1095-C to employees enrolled in a self-funded health plan who are not a full-time employees for any month of 2020.
Reminder on CA Reporting Timing
While the federal deadline for filing is extended to March 31, 2021, the deadline for filing coverage confirmation reports to the state of California remains January 31, 2021. This applies to employers with self-funded plans. (Insurance carriers handle the reporting for fully insured plans.)