Employers get a little more ACA leeway: What you need to know
If your company offers a health plan, you got an early Christmas present from the IRS.
In Notice 2016-70, the agency just extended one of the key deadlines for 2016 ACA reporting.
Specifically, the IRS pushed back the date by which employers have to provide individuals with 2016 Forms 1095-B and 1095-C. The new deadline to provide the notice is March 2, 2017 (originally it was Jan. 31, 2017).
As employers are well aware, these ACA reporting forms provide individuals with information about employers’ offers of healthcare coverage, as well as details on the coverage provided.
The IRS also extended its good faith penalty relief to the 2016 information-reporting process. Earlier this year, the feds said employers would have to show “reasonable cause” to have penalties waived by the feds for 2016 reporting. So this represents a change to that stance.
That’s good news, considering the reporting process is tricky enough, and the 2016 reporting forms include some notable differences.
One example: There are new spousal coverage indicator codes. Specifically, the 2016 forms include two new indicator codes – 1J and 1K – on Part II, Line 14 of Form 1095-C.
The two new codes will indicate conditional offers of healthcare coverage to spouses. A conditional offer to a spouse occurs when a coverage offering is subject to one or more “reasonable” conditions.
Some examples of conditional offers:
- Spouse certifies he or she isn’t eligible for group health coverage through his or her employer, or
- Spouse certifies he or she is not eligible for Medicare.
What hasn’t changed
While the IRS did extend the deadline for furnishing ACA reports to individuals, it hasn’t changed the deadline for getting the reporting info to the feds.
That means the deadline for filing 2016 Forms 1094-B, 1095-B, 1094-B and 1095-C with IRS will remain Feb. 28, 2017, for paper forms and March 31, 2017, for electronic filing.
The IRS also didn’t change anything about the automatic filing extensions some employers can receive; those are still available right now.
What about Trumpcare
Some employers may be thinking, “With a Trump administration taking charge in January, isn’t Obamacare likely to end anyway?”
In short, an outright repeal is highly unlikely. Many experts agree that gutting the entire law — a law that has completely reshaped our healthcare system over the past six years — would be chaotic and potentially harmful.
Specifically, a repeal would kill the healthcare exchanges and the federal subsidies promised to those individuals who purchased their plans on those very exchanges.
Result: An estimated 20 million Americans would lose their health insurance instantly.
What HR pros can expect instead: A slower phase-out of many of the key reforms in the ACA, replaced with other Trump-led reforms.
Bottom line: Although Trump’s promise to “repeal and replace” Obamacare could happen eventually, it’s going to be a long, slow process and it likely won’t happen with the stroke of apen. That means employers should continue to focus on complying with the ACA’s various provisions until the law actually changes.
After all, “I thought this was getting repealed” probably isn’t the type of excuse that’ll get the feds to waive non-compliance penalties.
Info: A tip of that hat goes to our sister website HR Benefits Alert, which originally published a version this article.
