There are a few changes to the Affordable Care Act reporting requirements for 2023. The Department of Treasury and the Internal Revenue Service published final regulations on December 12, 2022, which offer reporting relief for ACA reporting, specifically for Forms 1095-B and 1095-C. Most importantly, they allow employers and coverage providers to fulfill their duty to "furnish" the Forms to employees by:
Extending the deadline by 30 days
Publishing Forms for non-eligible employees on the employer’s website
Forms 1095-C Distribution Deadline Permanently Extended
Previously, employers were required by law to provide Form 1095-C by January 31 to eligible employees. Now there is a permanent, 30-day extension from January 31 to March 2. Since the extension is automatic, no additional extensions will be granted for furnishing statements to recipients. The Forms are due on March 1 in a leap year and the following business day if the extended due date occurs on a weekend or legal holiday.
Alternative Method of Providing Forms 1095-B/C to Non-Eligible Employees
The final regulations provide that an employer is not required to send Forms 1095-B/C to part-time employees and non-employees enrolled in the employer's self-insured plan. However, the employer must post a "clear and conspicuous notice" on its website that is easy to find for all employees and other responsible individuals, stating that individuals may receive a copy of their Form upon request. The notice must:
Include an email address, a physical address where the individual can send his/her request and a telephone number where individuals can contact the employer with questions
Be written in simple, non-technical language and in a font size large enough (including any visual cues or graphical figures) to draw the attention of a viewer to the fact that the information relates to tax returns reporting that individuals had health coverage
Be posted by March 2 (or other specified date) and kept on the same website through October 15 of the year following the calendar year to which the statements pertain (or the first business day after October 15, if October 15 falls on the weekend or legal holiday)
The employer must furnish the Form to individuals within 30 days of the date the request is received. This relief does not apply to full-time employees. Given that part-time employees who enroll in self-insured plans may need the tax form for states with individual mandates, we anticipate most employers not taking advantage of this method.
End of “Good Faith” Relief
The Treasury and IRS previously stated that they would temporarily not impose penalties for reporting incorrect or incomplete information if the employer could demonstrate it made a “good faith effort” to comply with the reporting requirements. This remained in place from tax years 2015 through 2020 to help give employers time to comply with the ACA when the rules were first implemented. Notice 2020-76 advised that "good faith" relief would be discontinued beginning with tax years 2021 and later. The final regulations reiterate that the temporary good faith relief will be discontinued.
Our Benefitfocus ACA Compliance Solution makes compliance easier and reduces your exposure to costly penalties by catching data risks early. We also monitor changes to ACA reporting and keep our customers up to date as new developments arise. If you have questions or are interested in learning more, contact us.