If your company offered an Employee Welfare Plan that was Self Funded Plan, A Minimal Essential Plan (MEC), Level funded and or if your company is deemed an Applicable Large Employer (50 or more employees), this information applies to you.
Since the passage of the Affordable Care Act (ACA / Obamacare), employers are required to comply with several reporting requirements. Affordable Care Act (ACA) reporting under Section 6055 and Section 6056 for the 2019 calendar year is due in early 2020. Specifically, reporting entities must:
- File returns with the IRS by Feb. 28, 2020 (or March 31, 2020, if filing electronically); and
- Furnish statements to individuals by March 2, 2020
Section 6055 applies to providers of minimum essential coverage (MEC), such as health insurance issuers and employers with self-insured health plans. These entities generally use Forms 1094-B and 1095-B to report information about the coverage they provided during the previous year.
Section 6056 applies to applicable large employers (ALEs)—generally, those employers with 50 or more full-time employees, including full-time equivalents, in the previous year. ALEs use Forms 1094-C and 1095-C to report information relating to the health coverage that they offer (or do not offer) to their full-time employees.
Penalty Relief Regarding the Furnishing Requirement under Section 6055 for 2019
Because the individual mandate penalty has been reduced to zero in 2019, an individual does not need the information on Form 1095-B in order to calculate his or her federal tax liability or file a federal income tax return. However, reporting entities required to furnish Form 1095-B to individuals must continue to expend resources to do so.
As a result, Notice 2019-63 provides relief from the penalty for failing to furnish a statement to individuals as required under Section 6055 in 2019 in certain cases. Specifically, the IRS will not assess a penalty under Section 6722 against reporting entities for failing to furnish a Form 1095-B to responsible individuals in cases where the following two conditions are met:
The reporting entity prominently posts a notice on its website stating that responsible individuals may receive a copy of their 2019 Form 1095-B upon request, accompanied by an email address and a physical address to which a request may be sent, as well as a telephone number that responsible individuals can use to contact the reporting entity with any questions; and
The reporting entity furnishes a 2019 Form 1095-B to any responsible individual upon request within 30 days of the date the request is received.
This 2019 Section 6055 furnishing penalty relief does not extend to the requirement to furnish Forms 1095-C to full-time employees. As a result, for full-time employees enrolled in self-insured health plans, penalties will continue to be assessed consistent with prior enforcement policies for any failure by ALEs to furnish Form 1095-C, including Part III, according to the applicable instructions.
Form 1095 Educational Resources
To guide you through the Form 1095 process, ABM Insurance & Benefit Services has compiled a list of educational resources that can be distributed to your employees. Use the following resources to teach your employees what these new tax forms mean – A sample has been attached but can customize for clients of ABM CLICK HERE TO ACCESS THE SAMPLE
- Forms 1095-A, 1095-B & 1095-C
o This “Know Your Benefits” article is designed for employees and features common questions and answers from the IRS regarding the new 1095-A, 1095-B & 1095-C tax forms. Note: This is a Q&A provided directly from the IRS and is not meant to be exhaustive.
- Form 1095-A: What You Need to Know
o Use this” Know Your Benefits” article to take the mystery out of Form 1095-A, and explain to your employees how they can use this information to their benefit come tax time.
- Form 1095-B: What You Need to Know
o Distribute this article to your employees to explain what information can be found on Form 1095-B, what employees may receive this information and how it can be helpful when filing individual tax returns.
- Form 1095-C: What You Need to Know
o Employees may receive Form 1095-C if they were full-time employees of a large employer (generally, one that employs 50 or more full-time employees) at any time during 2019. This article discusses the purpose of Form 1095-C, and how it can be used to help employees complete their income tax returns for the year.
For Additional Information Click HERE to access ACA Compliance Deadlines
If you or your company has questions regarding this information or need assistance with maintaining compliance, please contact Mike Alexander, Jr. at 800-362-2809. Since we have been working with Employee Welfare Plans for 28 years, we can assist and provide you with the necessary tools / resources to maintain compliance.