Final Regulations Issued on ACA Reporting

On December 15, 2022, the IRS published a final rule regarding information reporting under Sections 6055 and 6056. We covered the 2021 proposed rule in the December 9, 2021, edition of Compliance Corner.

Extension of Time to Furnish Forms

The final rule provides an automatic 30-day extension each year to Forms 1095-B or 1095-C distribution to individuals. Therefore, employers must distribute Forms 1095-B or 1095-C to individuals by March 2, 2022, instead of the original January 31, 2022, deadline. If March 2 falls on a weekend or legal holiday, statements must be furnished by the next business day to be considered timely. The final rule follows the 2021 proposed rule with the exception that the proposed regulations mentioned an automatic extension not to exceed 30 days, and the final rule added clarification by expressly stating an automatic 30-day extension.

Keep in mind the final rule does not impact the deadlines to file the forms with the IRS. Those deadlines remain February 28 (if filing by mail) and March 31 (if filing electronically).

Elimination of Good Faith Relief

The final rule also affirms the elimination of good faith relief from penalties if entities could show they made good faith efforts to comply with reporting requirements. This relief was intended to be transitional, and both the proposed rule and final rule confirm the elimination of good faith relief.

Alternative Method to Furnish 1095-B

Form 1095-B reports the months in which an individual is enrolled in qualified health coverage. The final rule allows an entity to use an alternative manner to furnish this information to covered individuals. The entity must post a “clear and conspicuous notice on the entity’s website stating that responsible individuals may receive a copy of their statement upon request.” The notice must include an email address, physical address and telephone number an individual can use for questions or to request a statement.

It is important to remember that Form 1095-B is only used by small employers (those not subject to the employer mandate) who sponsor a self-insured medical plan, or by large employers who sponsor a self-insured plan and cover individuals who are not considered full-time employees.

Minimum Essential Coverage and Limited Medicaid Services

And lastly, the final rule reiterates that Medicaid plans that provide only COVID-19 testing and diagnostic services under the Families First Coronavirus Response Act (FFCRA) are not considered Minimum Essential Coverage (MEC) under a government-sponsored program.

Final Regulations on ACA Reporting »