IRS Finalizes Rule on ACA Reporting Requirements

On December 12, 2022, the IRS released final regulations affecting certain provisions of the ACA reporting requirements. These final regulations replaced the proposed rules issued in 2021, with minimal changes and are effective December 15, 2022.

Extension of Individual Forms 1095-B/C

The final regulations permanently extend the deadline to furnish Forms 1095-B/C to individuals from January 31st to March 2nd each year.

The final regulations did not extend the deadline for filing the Forms 1094-B/C and 1095-B/C with the IRS. Those dates remain the same: February 28th for paper filings and March 31st for electronic filing. ALEs who issue 250+ Forms 1095-C are required to file electronically.

Alternative Method of Furnishing Forms 1095-B

The final regulations provide for certain reporting entities to use an alternative method for furnishing the Forms 1095-B to individuals. This would include a non-ALE who sponsors a self-funded or partially self-funded plan and is required to issue Forms 1095-B.

The reporting entity must post a clear and conspicuous notice on the entity’s website stating that individuals may receive a copy of their Form 1095-B upon request. This notice must include an email address, a physical address and phone number where the individual can request a copy or receive assistance. The notice must be retained on the entity’s website until October 15th of the year following the calendar year to which the reporting applies. The entity must supply a copy of the individual’s Form 1095-B within 30 days of receipt of the request.

The final regulations provide a “safe harbor” example for reporting entities to satisfy this notice requirement (as outlined in the paragraph directly above) by also including a statement or link on the main web page with the words “Tax Information” which links to a secondary web page with the words “IMPORTANT HEALTH COVERAGE TAX DOCUMENTS” in capital letters.

The intent of this alternative method is to reduce the administrative burden of ACA reporting for any tax years in which the individual mandate is $0. The final regulations do not relieve ALEs from furnishing the Forms 1095-C to full-time employees.

Elimination of the Good-Faith Relief from Penalties

The final regulations eliminate the good-faith transitional relief for late or incomplete ACA filings. Going forward, employers will have to show that a failure to file or furnish correct and complete Forms 1094-B/C and Forms 1095-B/C was due to reasonable cause and not willful neglect in order to avoid applicable penalties.