IRS Slashes Insurers' 2019 ACA Coverage Reporting Burden

The Compliance Background

Since the ACA system came to life, in 2010, Congress has zeroed out the ACA individual shared responsibility penalty. The penalty will not apply for months beginning after Dec. 31, 2018.

But people who want ACA exchange plan coverage still need coverage forms to apply for the ACA premium tax credit subsidy.

The 2019 IRS Rules

The IRS says that, for 2019, it let will coverage providers stop sending 1095-B forms out to all of the insureds automatically, if the coverage providers make it easy for the insureds to get 1095-B forms within 30 days, upon request.

To avoid having to send out 1095-B forms automatically, an insurer must put a prominent notice on its website giving an email address, a physical address and a telephone number that individuals responsible for coverage can use to ask for 1095-B forms.

The IRS says it will also ease the reporting burden on employers with self-insured health plans, by letting an employer with a self-insured plan stop sending 1095-C forms to any employees in the health plan who were part-time employees throughout 2019.

In addition, the IRS says it will:

• Push the deadline for the 1095-C forms going out to the insureds to March 2, 2020, from Jan. 31, 2020.
• Keep the regular deadlines for filing 1094-B, 1095-B, 1094-C and  1095-C forms with the IRS in place, but continue a policy of providing automatic deadline extensions.
• Continue to require senders of 1094-B, 1095-B, 1094-C and 1095-C forms to file those forms with the IRS.
• Continue to require employers to send out most of the 1095-C forms they had to send out for 2018.
• Continue to go easy on insurers or employers that try to get the information about the insureds right but make some mistakes.

But IRS officials say they will provide coverage information filers with relief for mistakes only if those filers have made "a good-faith effort to comply with the regulations."

"In determining good faith, the Service will take into account whether an employer or other coverage provider made reasonable efforts to prepare for reporting the required information to the Service and furnishing it to employees and covered individuals, such as gathering and transmitting the necessary data to an agent to prepare the data for submission to the Service or testing its ability to transmit information to the Service," officials write in the new IRS notice. "Reporting entities that fail to file an information return or furnish a statement by the extended due dates, except as otherwise provided in this notice, are not eligible for relief."

The IRS lists Danielle Pierce of the IRS Office of the Associate Chief Counsel as the principal author of the notice.

The Future

The IRS is asking for comments on how it should handle ACA employer coverage reporting rules for years after 2019.

Related

A copy of IRS Notice 2019-63 is available here.

— Read New ACA Employer Requirements Continue to Roll In, on ThinkAdvisor.

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