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Certain Employers Required to Electronically File Returns

Employers subject to the Affordable Care Act’s (ACA) information reporting requirements are reminded that the deadlines to file and furnish Forms 1094 and 1095 are quickly approaching. The reporting deadlines in 2018 are for reporting information on the 2017 calendar year, and are as follows:

  • Applicable large employers (ALEs)—generally those with 50 or more full-time employees, including full-time equivalents—must file Forms 1094-C and 1095-C with the IRS no later than February 28, 2018 (or April 2, 2018 if filing electronically). ALEs must also furnish a Form 1095-C to all full-time employees by March 2, 2018.
  • Self-insuring employers that are not considered ALEs, and other parties that provide minimum essential coverage, must file Forms 1094-B and 1095-B with the IRS no later than February 28, 2018 (or April 2, 2018, if filing electronically). These entities are also required to furnish a Form 1095-B to “responsible individuals” (may be the primary insured, employee, former employee, or other related person named on the application) by March 2, 2018.

Electronic Filing Requirements

Reporting entities filing 250 or more Forms 1095-B or Forms 1095-C must electronically file them with the IRS. Additional information on electronic filing can be found on the IRS ACA Information Returns (AIR) Program webpage.

image of alarm clock with tax time written on a yellow sticky note on it

‘Cadillac Tax’ Delayed Until 2022

Tax Previously Set to Become Effective in 2020

President Trump has signed the Extension of Continuing Appropriations Act, which (among other things) delays implementation of the “Cadillac Tax,” the Affordable Care Act’s excise tax on high-cost employer-sponsored health coverage, until 2022. Previously, this tax—which would impose a 40% tax on plans that cost more than $10,200 (for self-only coverage) and $27,500 (for family coverage)—was set to become effective in 2020.

person inputting numbers into calculator for tax season

Reminder: Individual Mandate Remains in Effect for 2018

Requirement is Effectively Repealed Beginning in 2019

Individuals are reminded that the section of the Tax Cuts and Jobs Act which effectively repealed the individual shared responsibility provision (“individual mandate”) of the Affordable Care Act does not become effective until 2019. As a result, individuals are required to have minimum essential health coverage, qualify for an exemption from the requirement, or pay a penalty tax for 2018.

man calculating taxes

IRS Will Not Accept Forms 1040 That Omit Health Coverage Information

IRS Issues Guidance for Taxpayers on Reporting Health Coverage

The IRS has announced that the upcoming 2018 filing season will be the first time that it will not accept electronically filed tax returns until taxpayers report their health care coverage pursuant to the individual shared responsibility provision (“individual mandate”) of the Affordable Care Act. In addition, returns filed on paper that do not address these requirements may be suspended pending the receipt of additional information, and any refunds may be delayed.

Background

The “individual mandate” (also known as individual shared responsibility) generally requires every individual to have minimum essential health coverage for each month, qualify for an exemption, or make a payment when filing his or her federal income tax return. More detailed information about the individual mandate is available in IRS Q&As.

IRS Instructions

‎To avoid refund and processing delays when filing 2017 tax returns in 2018, the IRS is instructing taxpayers to indicate on their Forms 1040, U.S. Individual Income Tax Return, whether they (and everyone on their return):

  • Had minimum essential health coverage;
  • Qualified for an exemption from the coverage requirement; or
  • Are making a payment.

Click here to read the IRS guidance in its entirety.

woman with young hands filling out paperwork

Health Care Reform Updates

Administration Eliminates Cost-Sharing Reduction Payments

Cuts to Take Effect Immediately

The Trump administration announced yesterday that it will no longer make cost-sharing reduction (CSR) payments to insurance companies under the Affordable Care Act (ACA). According to a statement issued by the U.S. Department of Health and Human Services (HHS), the agency’s decision to discontinue these payments immediately follows a legal review by HHS, the Department of Treasury, the Office of Management and Budget, and an opinion from the U.S. Attorney General.

Background

The ACA requires insurers to offer plans with reduced deductibles, copayments, and other means of cost sharing to eligible individuals who purchase plans through the Health Insurance Marketplace. In turn, insurers receive CSR payments arranged by the Secretary of HHS to cover the costs they incur because of this requirement. Whether CSR payments were properly appropriated by Congress has been the subject of litigation since 2014.

To read the HHS statement, click here.

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