IRS Extends Deadline to Supply ACA Forms to Employees

The extension on distributing Forms 1095-B or 1095-C to employees is automatic. Employers don’t have to request it, said Edward Fensholt, J.D., senior vice president and director of compliance services at Lockton, a benefits brokerage, and consultancy based in Kansas City, Mo. “As a result of this automatic 30-day extension, [a different] 30-day extension that would normally be available upon a showing of good cause is not available.
That is, the March 2 deadline is now a hard deadline,” he explained. Despite the extended deadline, the IRS is encouraging employers to furnish these forms to employees as soon as they are able.

IRS Filing Deadlines Not Extended

The due dates for filing 2017 information returns with the IRS, however, were not extended. The due dates to file information returns with the IRS

  • Feb. 28 for paper filers.
  • April 2 for electronic filers.

“Employers filing at least 250 Forms 1095-C with the IRS must do so electronically unless they obtain a waiver from the IRS,” Fensholt noted.

“Employers may obtain an automatic 30-day extension from the deadlines for filing with the IRS by submitting Form 8809 on or before those deadlines.”

The state of health insurance: group plans and individual

After months of failed efforts by Congressional Republicans to eliminate the Affordable Care Act, President Trump in October stepped in with two sweeping changes that are reverberating throughout the health insurance system.

The main order he issued immediately eliminates subsidies that are paid to health insurers that participate in government-run exchanges to reduce deductibles and copays for lower-income customers buying individual and family policies.

While some pundits say the move will create chaos in the individual market, they differ on the likely fallout for group policies.

But Trump did sign two other orders that could have a direct effect on the group market over time, but not immediately:

  • One would attempt to expand the use of health reimbursement accounts (HRAs), which employers could pay into so that employees can use those funds to purchase health coverage on the open market.
  • The other would allow employers to band together to create “association” plans, which would offer plans that are not as comprehensive as dictated by the ACA.

Cost-sharing fallout

Nineteen states have already sued to challenge the cost-sharing reduction subsidies, saying the ACA does not appropriate funding for the subsidies and hence they are illegal. Without them, insurers will likely have to significantly increase their premiums or pull out of the health insurance exchanges.
While the order means many people purchasing plans on the individual market will see drastic rate hikes, the order doesn’t directly affect group plans.

The American Benefits Council, a national trade association based in Washington, D.C. that advocates for employer-sponsored benefit plans, said that the move to cut off the subsidies could spur some insurers to increase their fees for large employer plans in order to make up for the lost revenue in the individual market.

“Employers rely on a healthy and viable individual health insurance marketplace since an unstable market could result in further cost-shifting from health-care providers to large employer plans,” the council said in a prepared statement.

“Additionally, erosion of the ACA exchanges would make individual market coverage a less viable option for part-time workers, early retirees, and those who would otherwise elect to secure coverage through the individual market rather than sign up for, or remain on, COBRA,” it added.

But that sentiment is not universal.