Certain employers are required to report to the IRS information about whether they offered health coverage to their employees and if so, information about the coverage offered. This information also must be provided to employees. These FAQs address these reporting requirements.
More detail about these information reporting requirements under section 6056 is available on the Information Reporting by Applicable Large Employers page. For guidance on how to complete the forms employers use to meet these reporting requirements (Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns, and Form 1095-C, Employer-Provided Health Insurance Offer and Coverage), see the Employer Information Reporting FAQs for Forms 1094-C and 1095-C.
Additional Information:
For more information, a list of resources is available on the ACA Information Center for Applicable Large Employers (ALEs) webpage.
- Basics of Employer Reporting:Questions 1-3
- Who is Required to Report: Questions 4-11
- Methods of Reporting: Questions 12-16
- How and When to Report the Required Information: Questions 17-24
- Designated Government Entity: Questions 25-28
- Other Third Party Service Providers: Questions 29
- Extended Due Dates and Transition Relief for 2015 and 2016 Reporting: Questions 30-34
- Additional Information
Basics of Employer Reporting
1. What are the information reporting requirements for employers relating to offers of health coverage under employer-sponsored plans?
The Affordable Care Act added sections 4980H and 6056 to the Internal Revenue Code. Under section 4980H, the employer shared responsibility provisions, certain employers, called applicable large employers, or ALEs, are required to offer qualifying health coverage to their full-time employees (and their dependents) or potentially be liable for an assessable payment, if at least one full-time employee receives the premium tax credit for coverage in the Marketplace. Section 6056 requires employers that are ALEs under the employer shared responsibility provisions to file information returns with the IRS about whether they offered health coverage to their full-time employees (and their dependents) and, if so, information about the offer of coverage. ALEs must also provide a copy of the information to the employee. For definitions of ALE and full-time employee, see Employers Subject to the Employer Shared Responsibility Provisions and Identification of Full-Time Employees sections in the Employer Shared Responsibility FAQs .
Under the regulations implementing section 6056, an ALE may be a single entity or may consist of a group of related entities (such as parent and subsidiary entities or other related/affiliated entities). This group of related entities is referred to as an Aggregated ALE Group. In either case, these reporting requirements apply to each separate entity, and each separate entity is referred to as an applicable large employer member (ALE Member). For more information about the treatment of related entities see Who is Required to Report and the definition section in the Instructions for Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns, and Form 1095-C, Employer-Provided Health Insurance Offer and Coverage.
The IRS will use the information provided on Form 1094-C and Form 1095-C to administer the employer shared responsibility provisions. In addition, the IRS and the employees of an ALE Member will use the information provided as part of the determination of whether an employee and his or her family are eligible for the premium tax credit under section 36B.
ALE Members that sponsor self-insured group health plans also are required to report information about employees (including former employees) and their spouse, dependents, and other family members who enroll in the self-insured coverage; these information reporting requirements for providers of minimum essential coverage apply under section 6055. ALE Members that sponsor self-insured group health plans generally provide the information required under both sections 6055 and 6056 on Form 1094-C and Form 1095-C. The IRS and individuals will use the information provided under section 6055 to verify compliance with the individual shared responsibility provisions under section 5000A.
For more information see the section 6055 FAQs and for details about the section 6056 information reporting requirements and additional guidance on how to complete Form 1094-C and Form 1095-C, see the Questions and Answers about Information Reporting by Employers on Form 1094-C and 1095-C.
2. When did the information reporting requirements first go into effect?
Information reporting under section 6056 was first required with respect to coverage offered (or not offered) in 2015. For information on transition relief, see How and When to Report the Required Information and Extended Due Dates and Transition Relief for 2015 and 2016 Reporting.
3. Where is more detailed information available about these reporting requirements?
The regulations under section 6056 provide further guidance on the information reporting requirements for ALEs, and the regulations under section 6055 provide guidance on the information reporting requirements for providers of minimum essential coverage. Regulations on the employer shared responsibility provisions under section 4980H and the Employer Shared Responsibility FAQs provide guidance on determining an employer’s status as an ALE and determining an employee’s status as a full-time employee, including defining and providing rules for calculating hours of service. The Instructions for Forms 1094-C and 1095-C and the Question and Answers about Information Reporting by Employers on Form 1094-C and Form 1095-C provide guidance on how to complete Form 1094-C and Form 1095-C.
Who is Required to Report
4. Who is required to report under section 6056?
Employers subject to the employer shared responsibility provisions, called applicable large employers or ALEs, are required to report under section 6056. An ALE is an employer that employed an average of at least 50 full-time employees (including full-time equivalent employees) on business days during the preceding calendar year.
An ALE may be a single employer or may consist of a group of related employers (such as parent and subsidiary entities or other related/affiliated entities), called an Aggregated ALE Group. An Aggregated ALE Group refers to a group of employers treated as a single employer under section 414(b), (c), (m) or (o). Any employer that is an ALE or a member of an Aggregated ALE Group is called an ALE Member. An ALE Member is a member of the Aggregated ALE Group for a month if it is treated as a single employer with the other members of the group on any day of the calendar month. The reporting requirements under section 6056 apply to each ALE Member separately.
Additional information about who is an ALE, including special rules for new employers and employers with seasonal workers or workers with TRICARE or Veterans Administration coverage, is available in regulations issued under section 4980H and in related Employer Shared Responsibility FAQs (see Employers Subject to the Employer Shared Responsibility Provisions and Identification of Full-Time Employees). For information about which employees an ALE Member must report on, see the Question and Answers about Information Reporting by Employers on Form 1094-C and Form 1095-C.
5. If two or more related employers together are an Aggregated ALE Group under section 4980H (so that each related employer is an ALE Member), how do they comply with the information reporting requirements?
For purposes of the information reporting requirements, each ALE Member must file Forms 1094-C and 1095-C with the IRS and furnish Form 1095-C to its full-time employees, using its own EIN. This is the case even if a particular ALE Member does not employ enough employees to meet the 50-full-time-employee threshold. See Employers Subject to the Employer Shared Responsibility Provisions and Identification of Full-Time Employees in the Employer Shared Responsibility FAQs for more information about calculating the number of full-time employees (including full time equivalent employees).
For purposes of the information reporting requirements under section 6056, government entities, churches, and a convention or association of churches should determine whether a person or group of persons is an ALE and whether a particular entity is an ALE Member in the same way they made those determinations for purposes of the employer shared responsibility provisions under section 4980H.
6. Are nonprofit and government entities required to report under section 6056?
Yes. Section 6056 applies to all employers that are ALE Members, regardless of whether the employer is a nonprofit, tax-exempt or government entity (including federal, state, local, and Indian tribal governments).
7. Is an ALE Member required to report under section 6056 if the ALE Member has no full-time employees?
No. An ALE Member that does not have any employee who was a full-time employee in any month of the year (that is, in general, no employees or no employees who averaged at least 30 hours of service per week in any month) is not required to report under section 6056. An ALE Member is required to report if it has one or more employees who were full-time employees for any month of the year. But see the next question regarding information reporting under section 6055 for ALE Members that sponsor self-insured health plans that may be required on Form 1094-C and Form 1095-C if those ALE Members have no full-time employees. See Identification of Full-Time Employees in the Employer Shared Responsibility FAQs for more information on identifying full-time employees.
8. Is an ALE Member that sponsors a self-insured health plan required to file Form 1094-C and Form 1095-C if the ALE Member has no full-time employees?
Generally, yes. While an ALE Member without any full-time employees is not required to report under section 6056, an ALE Member that sponsors a self-insured health plan in which any employee or a spouse or dependent of any employee has enrolled is required to file Form 1094-C and Form 1095-C, to satisfy the section 6055 information reporting requirements for providers of minimum essential coverage. This is the case for any individual who was an employee (or spouse or dependent of an employee) for any month of the year, whether or not the employer has any full-time employees and whether or not the employee is a full-time employee.
However, for an individual who enrolled in coverage but was not an employee in any month of the year (and whose coverage was not a result of the relationship to the employee, such as a spouse or dependent), the employer may file Forms 1094-B, Transmittal of Health Coverage Information Returns and 1095-B, Health Coverage, or Forms 1094-C and 1095-C for that individual. For more information on reporting of enrollment information for non-employees, see the Instructions for Forms 1094-C and 1095-C.
9. Is an employer that is not subject to the employer shared responsibility provisions (that is, an employer that is not an ALE Member) required to report under section 6056 or to file Form 1094-C or Form 1095-C?
No. An employer that is not subject to the employer shared responsibility provisions is not required to report under section 6056. Thus, an employer that employed fewer than 50 full-time employees (including full-time equivalent employees) during the preceding calendar year is not subject to the reporting requirements of section 6056. See Employers Subject to the Employer Shared Responsibility Provisions.
10. Is an employer that is not an ALE Member required to report under section 6056 or to file Form 1094-C or Form 1095-C if the employer sponsors a self-insured health plan?
No. An employer that is not an ALE Member that sponsors a self-insured health plan in which any individual has enrolled is not subject to the reporting requirements of section 6056 and should not file Form 1094-C or Form 1095-C. However, the employer is subject to the reporting requirements under section 6055 for providers of minimum essential coverage. The employer will generally satisfy its reporting obligations under section 6055 by filing Form 1094-B and Form 1095-B for employees (and spouses and dependents of employees) who enrolled in coverage. See section 6055 Questions and Answers.
11. Is an ALE Member required to report under section 6056 for a full-time employee who is not offered coverage during the year?
Yes. An ALE Member is required to report information about the coverage, if any, offered to each of its full-time employees, including whether or not an offer of coverage was made. This requirement applies to all ALE Members with full-time employees, regardless of whether they offered coverage to all, none, or some of their full-time employees. For each of its full-time employees, the ALE Member is required to file Form 1095-C with the IRS and furnish a copy of Form 1095-C to the employee, regardless of whether coverage was or was not offered to the employee. Therefore, even if an ALE Member does not offer coverage to any of its full-time employees, it must file returns with the IRS and furnish statements to each of its full-time employees to report that coverage was not offered. See Identification of Full-Time Employees for more information on identifying full-time employees, and see the Instructions for Forms 1094-C and 1095-C and the Questions and Answers about Information Reporting by Employers on Form 1094-C and Form 1095-C for more information on how to report.
Methods of Reporting
12. Are different methods available to ALE Members for reporting required information to the IRS and furnishing statements to employees?
Yes. The section 6056 regulations provide a general method that all ALE Members may use for reporting to the IRS and for furnishing statements to full-time employees, and also provide alternative reporting methods for eligible ALE Members. If an ALE Member is not eligible to use either one of the alternative reporting methods for some or all of its employees, the ALE Member must use the general method for those employees. In any case, the alternative reporting methods are optional, and an ALE Member may choose to report for all of its full-time employees using the general method even if an alternative reporting method is available.
To simplify the section 6056 reporting process, certain information required to be reported to the IRS and furnished to full-time employees is reported through the use of indicator codes rather than by providing more detailed information. For further details about the section 6056 reporting process, see the Instructions for Forms 1094-C and 1095-C and the Questions and Answers about Information Reporting by Employers on Form 1094-C and 1095-C.
13. What is the general method of reporting?
Under the general method, each ALE Member:
- satisfies the requirement to file a section 6056 return with the IRS by filing a Form 1094-C (transmittal) and, for each full-time employee, a Form 1095-C (employee statement); and
- satisfies the requirement to furnish a section 6056 statement to a full-time employee by providing each of its full-time employees a Form 1095-C.
An ALE Member using the general method with employees participating in a self-insured plan also uses Form 1095-C to satisfy the reporting requirements under section 6055 for providers of minimum essential coverage, by filling out a separate section (Part III) of the Form 1095-C. Part III was designed to allow ALE Members that sponsor self-insured group health plans to combine reporting to satisfy both the section 6055 reporting requirements and the section 6056 reporting requirements, as applicable, on a single return.
The requirement to file and furnish a section 6056 return (and, if the employer sponsors a self-insured plan, the requirement to file a section 6055 return) under the general method also may be satisfied by using a substitute form. Consistent with the general rules governing substitute forms, the substitute form must include all of the information required on Form 1094-C and Form 1095-C and satisfy all form and content requirements as specified by the IRS. For more information see Publication 5223, General Rules and Specifications for Affordable Care Act Substitute Forms 1095-A, 1094-B, 1095-B, 1094-C, and 1095-C .
14. What are the alternative methods of reporting?
Two alternative methods of reporting under section 6056 were developed to minimize the cost and administrative burdens for employers. The alternative reporting methods, which are available in cases where simplified reporting provides sufficient information for employees and the IRS, may permit employers to provide less detailed information than under the general method for reporting. These simplified alternative reporting methods and the conditions for using them are described in detail in Subsections A through D of Section X of the preamble to the section 6056 regulations and in the Instructions for Forms 1094-C and 1095-C. The alternative reporting methods are:
- Reporting based on a certified Qualifying Offer
- Reporting without separate identification of full-time employees if certain conditions related to offers of coverage are satisfied (98% Offers)
15. How does an ALE Member report under the Qualifying Offer method?
The Qualifying Offer method allows an employer to complete the Form 1095-C under simplified rules and to furnish to certain full-time employees a document other than the Form 1095-C. To be eligible to use the Qualifying Offer method, the ALE Member must certify that it made a Qualifying Offer to one or more of its full-time employees for all calendar months during the calendar year in which the employee was a full-time employee for whom an employer shared responsibility payment could apply.
A “Qualifying Offer” is an offer that satisfies all of the following criteria:
- It is an offer of coverage that provides minimum value;
- The employee cost for employee-only coverage for each month does not exceed 9.5% (as adjusted) of the mainland single federal poverty line divided by 12; and
- The offer of coverage is also made to the employee’s spouse and dependents (if any).
An ALE Member reporting under the Qualifying Offer method may furnish a simplified statement to an employee that received a Qualifying Offer for all 12 months of the calendar year rather than furnishing a copy of the Form 1095-C that will be filed with the IRS. In general, however, an employer that sponsors a self-insured plan may not use the alternative statement for any employee who has enrolled in that self-insured coverage because the employer is required to report that coverage on Form 1095-C.
For additional details on the reporting rules for a Qualifying Offer, see the Instructions for Forms 1094-C and 1095-C and the Questions and Answers about Information Reporting by Employers on Form 1094-C and 1095-C. For more information on how the 9.5% of the mainland single federal poverty line is adjusted over time see question 12 of Notice 2015-87.
16. How does an ALE Member report under the 98% Offer Method?
An ALE Member may qualify for the 98% Offer Method of reporting if it:
- Offered affordable coverage providing minimum value to at least 98% of its employees for whom it is filing a Form 1095-C (taking into account all months during which the individuals were employees and were not in a Limited Non-Assessment Period (see the Instructions for Forms 1094-C and 1095-C for the definition of this term)), and offered coverage to those employees’ dependents, and
- Certifies to the IRS that it did so.
The ALE Member is still required to file and furnish Forms 1095-C for all its full-time employees who were full-time employees for one or more months of the calendar year.
For further details on the 98% Offer Method, see the Instructions for Forms 1094-C and 1095-C and the Questions and Answers about Information Reporting by Employers on Form 1094-C and 1095-C.
How and When to Report the Required Information
17. When must an ALE Member file the required information return with the IRS?
An ALE Member must generally file Form 1094-C and Form 1095-C on or before February 28 (March 31 if filed electronically) of the year immediately following the calendar year for which the offer of coverage information is reported.
However, see the questions below regarding an extension of these dates that was in effect for 2015 reporting due in 2016. The due dates for filing in 2017 for 2016 were not extended.
Regulations under section 6081 address extensions of time to file information returns. Under these regulations, ALEs may claim an automatic 30-day extension of time for filing information returns by submitting a Form 8809, Application for Extension of Time To File Information Returns. Under certain conditions, ALEs may also request additional extensions of time to file. For additional information see the Instructions for Forms 1094-C and 1095-C.
18. When must an ALE Member furnish the statements to full-time employees?
An ALE Member must generally furnish Form 1095-C on or before January 31 of the year immediately following the calendar year to which the information relates. And under the section 6056 regulations, the IRS may grant extensions of time of up to 30 days to furnish Form 1095-C for good cause shown.
However, see the questions below regarding extensions of these dates for reporting regarding 2015 and 2016 for Forms 1095-C due in 2016 and 2017, respectively.
19. Must an ALE Member file the returns with the IRS electronically?
The regulations require electronic filing with the IRS of Form 1094-C (transmittal) and Form 1095-C (employee statement) except for an ALE Member filing fewer than 250 Forms 1095-C during the calendar year. Each Form 1095-C is counted as a separate return, and only Forms 1095-C are counted in applying the 250-return threshold for section 6056 reporting. For more detailed information, including on how this rule applies for corrected returns, see the Instructions for Forms 1094-C and 1095-C and Affordable Care Act Information Returns (AIR) Program.
20. Must an ALE Member furnish the employee statements to full-time employees electronically?
The regulations permit, but do not require, ALE Members to furnish Form 1095-C electronically to full-time employees if notice, consent, and hardware and software requirements are met. The regulations require that, for each full-time employee to whom the information is furnished, the ALE Member must obtain consent from the employee before Form 1095-C may be furnished electronically. See the Instructions for Forms 1094-C and 1095-C for additional information about obtaining consent for electronic furnishing.
Statements reporting coverage under an expatriate health plan, however, may be furnished electronically unless the recipient explicitly refuses to consent to receive the statement in an electronic format.
21. May an ALE Member furnish a Form 1095-C to an employee by hand delivery?
Yes. Form 1095-C may be delivered to employees in any manner permitted for delivery of Form W-2 (Wage and Tax Statement). But see the question and answer above for the requirements that must be met to furnish employee statements electronically.
22. Must an ALE Member furnish a Form 1095-C within 30 days of the employee's written request if the employee terminates employment and requests the statement?
No. This requirement applies for Forms W-2 (Wage and Tax Statement) under the provisions of section 6051, but does not apply for a Form 1095-C. Accordingly, an employer may, but is not required to, furnish a Form 1095-C upon an employee’s request following a termination of employment. Also note that if the employer furnishes a Form 1095-C to the employee under these circumstances and the relevant information changes (for example, the employee is rehired before the end of the year), the employer will need to furnish an updated Form 1095-C to the employee reflecting the updated information as filed with the IRS.
23. For purposes of reporting, including reporting facilitated by a third party, may an ALE Member file more than one Form 1094-C?
Yes. An ALE Member may file more than one Form 1094-C, provided that one (and only one) of those transmittals is an Authoritative Transmittal reporting aggregate employer-level data for the ALE Member. See the Instructions for Forms 1094-C and 1095-C for further details about the Authoritative Transmittal.
For example, Corporation XYZ has two separate operating divisions, Division A and Division B. XYZ may file separate Forms 1094-C for Division A and Division B, but must designate one of them as the Authoritative Transmittal reporting combined employer-level data including both divisions.
24. May an ALE Member satisfy its reporting requirements for an employee by filing and furnishing more than one Form 1095-C that together provide the necessary information?
No. There must be only one Form 1095-C for each full-time employee for that full-time employee’s employment with the ALE Member.
For instance, in the example in the above question, assume an employee worked for both Division A and Division B of Corporation XYZ during the year. Because both divisions are part of the same ALE Member (Corporation XYZ), the employee should receive only one Form 1095-C from Corporation XYZ reflecting service in both Division A and Division B.
In contrast, assume that A and B were not divisions but were separate employers, Subsidiary A and Subsidiary B. Each subsidiary is an ALE Member that is required to separately satisfy the reporting requirements. Generally, a full-time employee who worked for both Subsidiary A and Subsidiary B during the year should thus receive a Form 1095-C from Subsidiary A and a separate Form 1095-C from Subsidiary B. See the instructions for Forms 1094-C and 1095-C for how to determine which ALE Member reports for an employee for a month if the employee works for two or more ALE Members during a calendar month.
Note that a full-time employee of an ALE Member may in some circumstances receive a Form 1095-C and a separate form 1095-B reporting coverage information under a self-insured plan sponsored by a related employer (for instance, a DGE that has been delegated reporting authority under section 6055). However, no employee should receive more than one Form 1095-C from or on behalf of the same ALE Member.
Designated Government Entity
25. May an ALE Member that is a governmental unit designate a third party to file the return and furnish the statements under section 6056 on its behalf?
Yes. Section 6056 and the regulations provide that an ALE Member that is a governmental unit (defined as the government of the United States, any State or political subdivision thereof, or any Indian tribal government (as defined in section 7701(a)(40)) or subdivision of an Indian tribal government (as defined in section 7871(d)), may report under section 6056 on its own behalf or may designate another person or persons, including another entity, to report on its behalf. A person may be designated to file the return and furnish the statements under section 6056 on behalf of the ALE Member if the person is part of or related to the same governmental unit as the ALE Member. A government entity that is appropriately designated to file for another governmental unit is referred to as a Designated Government Entity (DGE).
A separate Form 1094-C must be filed for each ALE Member for which the DGE is reporting. The DGE must provide the name, address and EIN of both the DGE and the ALE Member for which it is reporting. Additionally, the regulations require that there be a single Authoritative Transmittal, Form 1094-C, reporting aggregate employer-level data for the ALE Member (including full-time employees of the ALE Member the reporting for which has been transferred to a DGE), and that there be only one Form 1095-C for each full-time employee of the ALE Member with respect to employment with that ALE Member. For additional details, see the Instructions for Forms 1094-C and 1095-C and the Questions and Answers about Information Reporting by Employers on Form 1094-C and 1095-C.
The DGE must agree that it is the person appropriately designated by the governmental unit to report for the governmental unit and that it is responsible for reporting under section 6056 on behalf of the ALE Member. Thus, the DGE is subject to the information reporting penalty provisions of sections 6721 and 6722. However, the ALE Member (and not the DGE) remains subject to any potential liability under section 4980H.
26. May an ALE Member that is a governmental unit that sponsors a self-insured health plan designate a third party to file the return and furnish the statements under section 6055 on its behalf?
Yes. An employer that is a governmental unit that sponsors a self-insured health plan may designate a DGE to satisfy its reporting obligations under section 6055. The procedures for a governmental unit to designate a DGE for reporting under section 6055 are the same as those for designating a DGE for reporting under section 6056 as described in the question above, and the regulations under section 6055. As with the designation under section 6056, a governmental unit that designates a DGE for reporting under section 6055 remains subject to any potential liability under section 4980H.
27. May an ALE Member that is a governmental unit that sponsors a self-insured health plan designate a DGE for its reporting obligations under section 6055 but not for its reporting obligations under section 6056?
Yes. An employer that is a governmental unit that sponsors a self-insured health plan may designate a DGE for its reporting obligations under section 6055, as discussed in the question above, but decide not to designate a DGE for its reporting obligations under section 6056. For details on which forms to complete and how, see the Instructions for Forms 1094-C and 1095-C.
28. How does the delegation of the reporting responsibility to a DGE affect the requirement that one Form 1094-C be designated as the Authoritative Transmittal containing aggregate employer-level data?
Each governmental unit that is an ALE Member must file a single Authoritative Transmittal, Form 1094-C, containing the aggregate employer-level data for the governmental unit (including the total number of full-time employees and the total number of employees of the governmental unit for each month of the calendar year, regardless of the number of Form 1095-Cs transmitted with that particular Form 1094-C). The governmental unit may delegate to the DGE the requirement to file a Form 1094-C Authoritative Transmittal.
For example, assume (1) County X had 1,000 full-time employees all of whom were offered employer-provided health coverage, (2) that coverage was offered to 850 of the 1,000 full-time employees through State Y’s self-insured health plan, and (3) County X delegated the reporting of its offers of coverage information for those 850 full-time employees to State Y. In that case, County X also may delegate to State Y the responsibility to file an Authoritative Transmittal, Form 1094-C, so that the Form 1094-C filed by State Y as the DGE on behalf of County X as the employer also would indicate that it is the Authoritative Transmittal and report that County X had 1,000 full-time employees. In that case, the Form 1094-C filed by County X covering the remaining 150 full-time employees would not indicate that it is an Authoritative Transmittal.
Other Third Party Service Providers
29. May an ALE Member hire a third party administrator or other third party service provider to file the return with the IRS and furnish the statements to employees required under section 6056?
Yes. ALE Members may enter into arrangements with issuers, other ALE members or third parties to have the other party file the return with the IRS, furnish the statements to its employees, or both. However, entering into a reporting arrangement does not transfer the ALE Member’s potential liability under section 4980H and (except in the case of a related entity properly designated by a governmental unit) does not transfer the potential liability for failure of the ALE Member to file timely, complete and accurate returns and furnish timely, complete and accurate statements under section 6056. If a person who prepares returns or statements required under section 6056 is a tax return preparer, that person will be subject to the requirements generally applicable to tax return preparers.
Because ALE Members are responsible for reporting under section 6056, the Form 1094-C that is filed on behalf of the ALE Member must reflect that ALE Member’s EIN. Also, if more than one third party is facilitating reporting for an ALE Member, there must be only one Form 1094-C Authoritative Transmittal reporting aggregate employer-level data for the ALE Member. Additionally, there must be only one Form 1095-C for each full-time employee with respect to employment with that ALE Member. For additional details, see the Instructions for Forms 1094-C and 1095-C and the Questions and Answers about Information Reporting by Employers on Form 1094-C and 1095-C.
Extended Due Dates and Transition Relief for 2015 and 2016 Reporting
30. Were the due dates for filing and furnishing 2015 Forms 1094-C and 1095-C extended?
Yes. On December 28, 2015, the IRS issued Notice 2016-4, which extended the due dates for the 2015 information reporting requirements, for both filing information returns with the IRS and furnishing statements to individuals, for insurers, self-insured employers, and certain other providers of minimum essential coverage under section 6055, and the information reporting requirements for ALE Members under section 6056.
Specifically, Notice 2016-4 extended the due date for furnishing to individuals the 2015 Forms 1095-B and 1095-C, from January 31, 2016, until March 31, 2016, and extended the due date for filing with the IRS the 2015 Forms 1094-B, 1095-B, 1094-C, and 1095-C from February 29, 2016, to May 31, 2016 if not filing electronically, and from March 31, 2016, to June 30, 2016 if filing electronically. However, the IRS continues to accept returns filed after the June 30, 2016 deadline for ALE Members that were not able to submit all required ACA information returns by June 30, 2016.
These extensions applied automatically to all employers and other coverage providers and were longer than the 30-day extensions that could otherwise be obtained. Therefore, the IRS did not process any previously requested extensions of these deadlines for 2015 reporting in 2016. Employers or other coverage providers that did not comply with the extended due dates in Notice 2016-4 may be subject to penalties under section 6722 or 6721 for failure to timely furnish and file.
31. For the 2015 information reporting requirements, did Notice 2016-4 affect the rules under sections 6721(b) and 6722(b) concerning the reduction of penalty amounts for insurers, self-insured employers and ALEs?
Yes. Because the deadlines under sections 6055 and 6056 for furnishing Forms 1095-B and 1095-C to individuals and filing Forms 1094-C, 1095-C, 1094-B, and 1095-B with the IRS were extended as described in the above question, the August 1, 2016 deadline for reduction in penalty amounts to correct the failures described in sections 6721(b)(2) and 6722(b)(2) also was extended.
For statements furnished to individuals under sections 6055 and 6056, any failures that reporting entities corrected by April 30 and October 1, 2016, respectively under section 6722(b)(1) and (b)(2), were subject to reduced penalties.
For returns filed on paper with the IRS under sections 6055 and 6056, any failures that reporting entities corrected by June 30 or November 1, 2016, respectively under sections 6721(b)(1) and (b)(2), were subject to reduced penalties.
For returns filed electronically with the IRS under sections 6055 and 6056, any failures that reporting entities corrected by July 30 or November 1, 2016, respectively under sections 6721(b)(1) and (b)(2), were subject to reduced penalties.
These extended dates have no effect on the penalty relief described below, for incomplete or incorrect returns filed or statements furnished to employees in 2016 for coverage offered in calendar year 2015. However, the IRS has publicly stated in various forums that filers of Forms 1094-B, 1095-B, 1094-C and 1095-C that missed the June 30, 2016, due date will not generally be assessed late filing penalties under section 6721 if the reporting entity made legitimate efforts to register with the AIR system and to file its information returns, and it continued to make such efforts and completed the process as soon as possible. In addition, consistent with existing information reporting rules, filers that are assessed penalties may still meet the criteria for a reasonable cause waiver from the penalties.
32. Were the due dates for filing and furnishing 2016 Forms 1094-C and 1095-C extended?
IRS has extended the due date for furnishing 2016 Forms 1095-C to individuals, but has not extended the due date for filing the 2016 Forms 1094-C and 1095-C with the IRS. Specifically, Notice 2016-70 extended the due date for furnishing the 2016 Form 1095-C to individuals, from January 31, 2017, until March 2, 2017.
The extension applies automatically and does not require the submission of any request or other documentation to the IRS. In view of this automatic extension, the rules allowing the IRS to grant extensions of time of up to 30 days to furnish Form 1095-C will not apply to the extended due date. Also, because the 30-day extension of the due date to furnish applies automatically and is as generous as the permissive 30-day extensions of time to furnish 2016 information statements under section 6056 that have already been requested by some reporting entities in submissions to the IRS, the IRS will not formally respond to those requests.
Under Notice 2016-70, the extended furnishing due date also applies for purposes of section 6055 reporting for 2016 (Forms 1094-B and 1095-B).
Although IRS has not extended the due date for filing 2016 Forms 1094-C and 1095-C, note that Notice 2016-70 does not affect the normal provisions regarding automatic extensions of time for filing information returns, which can be obtained by submitting a Form 8809, Application for Extension of Time To File Information Returns, and it also does not affect the provisions regarding additional extensions of time to file.
33. For the 2016 information reporting requirements, did Notice 2016-70 affect the rules under sections 6721(b) and 6722(b) concerning the reduction of penalty amounts for reporting under sections 6055 or 6056?
No. Notice 2016-70 did not affect the rules under sections 6721(b) and 6722(b) concerning the reduction of penalty amounts for 2016 reporting under section 6055 or 6056.
34. Is relief available from penalties for incomplete or incorrect returns filed or statements furnished to employees in 2016 for coverage offered (or not offered) in calendar year 2015 and in 2017 for coverage offered (or not offered) in calendar year 2016?
Yes. In general, ALE Members were subject to new information reporting requirements starting in 2016 for offers of coverage in 2015. For these new information reporting requirements, the penalty under section 6721 may apply to an ALE Member that fails to file timely information returns, fails to include all the required information, or includes incorrect information on the return. Similarly, the penalty under section 6722 may apply to an ALE Member that fails to timely furnish the statement, fails to include all the required information, or includes incorrect information on the statement.
In implementing new information reporting requirements, short-term relief from reporting penalties frequently is provided. This relief generally allows additional time to develop appropriate procedures for collection of data and compliance with the new reporting requirements. Accordingly, for reporting in 2016 for offers of coverage in 2015 and for reporting in 2017 for offers of coverage in 2016 (see Notice 2016-70), the IRS will not impose penalties under sections 6721 and 6722 on ALE Members that can show that they have made good faith efforts to comply with the information reporting requirements.
Specifically, relief is provided from penalties under sections 6721 and 6722 for returns and statements filed and furnished in 2016 to report offers of coverage in 2015 and in 2017 to report offers of coverage in 2016 for incorrect or incomplete information reported on the return or statement. No relief is provided in the case of ALE Members that cannot show a good faith effort to comply with the information reporting requirements or that fail to timely file an information return or furnish a statement.
In addition, consistent with existing general information reporting rules, the waiver of penalty and special rules under section 6724 and the applicable regulations, including abatement of information return penalties for reasonable cause, may apply to certain failures under section 6721 or 6722 both for information returns filed and statements furnished to individuals. In particular, penalty relief may apply if the IRS determines that the standards for reasonable cause under section 6724 have been met.
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Additional Information:
For more information, a list of resources is available on the ACA Information Center for Applicable Large Employers (ALEs) webpage.