Required Notifications for Employers
Employers of all sizes sponsoring group health plans are responsible for providing certain notifications to employees. Whether a particular notice applies will depend on the state of an employee's employment cycle.
This brief summary provides a quick overview of which notices apply during important time periods, and may need to be revisited frequently during the year.
IRS Extends Employer Deadline for 6055 and 6056 Reporting
Employee Form Distribution Extended to March 31, 2016
On December 28, 2015, the Internal Revenue Service (IRS) released Notice 2016-4, and delayed the required reporting of Sections 6055 and 6056 for the 2015 reporting year. Employers must distribute Forms 1095-B and 1095-C to employees by
March 31, 2016, as opposed to the original due date of
February 1, 2016.
This applies to both the employer furnishing information to individuals and filing with the IRS, for insurers, self-insuring employers, and certain other providers of minimum essential coverage under Internal Revenue Code (IRC) Section 6055, and the information reporting requirements for Applicable Large Employers (ALE) under IRC Section 6056.
IRS Notice 2016-4 also provides guidance to individuals, who as a result of these extensions, might not receive a Form 1095-B or Form 1095-C by the time they file their 2015 tax returns. Guidance will appear in the Internal Revenue Bulletin 2016-3 dated
January 19, 2016.
Option to File by Paper or Electronic Submission Extended by Two Months
If filing by paper, Forms
1094-B,
1095-B,
1094-C and
1095-C must be filed with the IRS by
May 31, 2016 (changed from
February 29, 2016). If filing electronically, the forms are due to the IRS by
June 30, 2016 (changed from
March 31, 2016). The extended deadlines apply to all filers automatically. In summary, the deadline for distributing forms to employees has been extended two months, while the filing deadline with the IRS has been extended three months.
Purpose of Reporting and Extension Deadline
The original due dates were aligned so that individual taxpayers could use the information contained in the forms to file their individual tax returns. Specifically,
the information is needed by individuals to help determine whether they were eligible for the premium tax credit or subject to the individual mandate. The IRS has granted this automatic extension due to the fact that insurers, self-insuring employers and other providers of minimum essential coverage need additional time to
adapt and implement systems and procedures to comply with the reporting requirement. As a result of this delay, if individuals have not received the information by the time they file their individual tax return, they may rely upon other information received from employers or coverage providers when filing their returns. Individuals need not amend their returns once they receive the forms, but should retain the forms with their tax records.
Employer Subject to Penalties for Non-Compliance
The IRS reinforced that an employer should make a good-faith effort with reporting. If an employer does not comply with the extended deadlines, the employer could be subject to penalties.
Benefit Concepts Recommendation
Employers should notify its employees of its procedures and intentions to comply with the IRS reporting requirement and clarify expectations of when an employee can expect the required 1095 tax reporting forms. The company's accountant should be able to assist further with tax preparation and with your company's obligation under Section 6055 and Section 6056. For additional information, contact your Benefit Consultant at Benefit Concepts.
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