Jan 20, 2023Medicare Part D: Plan Sponsors Must Complete Disclosure to CMS by March 1
Medicare Part D: Plan Sponsors Must Complete Disclosure to CMS by March 1. Learn more in this latest Compliance Advisory.
January 5, 2023, Per UBA
‘Tis the season for applicable large employers (ALEs) to scramble to meet their Affordable Care Act (ACA) obligation to provide full-time employees with individual statements that provide group health coverage information required to be filed with the IRS on Form 1095-C. Although the ACA generally requires ALEs to furnish individual statements by no later than January 31 of the year following the year being reported, each year the IRS has extended the deadline by 30 days. The IRS recently issued final rules that will make the 30-day extension permanent effective for calendar years starting on or after January 1, 2022. So, individual statements relating to 2022 coverage must be provided by no later than March 2, 2023.
NOTE: The California Franchise Tax Board (FTB) requires that employees be provided with a Form 1095-C no later than January 31st (FTB Pub. 3895C). This deadline conflicts with new permanent federal deadline of March 2 but only applies to California employees.
The final regulations also provide for an alternative means for entities required to furnish Form 1095-B individual statements for tax years where the individual responsibility payment remains zero as set by the Tax Cuts and Jobs Act (TCJA). For those years, reporting entities can post a clear and conspicuous notice on their website stating that individuals may receive a statement upon request. The notice must:
Because the TCJA had no effect on the ACA’s employer shared responsibility payment (ESRP) rules, which are enforced based on information on Form 1095-C, ALEs will not be able to use an alternative method of providing individual statements to full-time employees. ALEs can only use an alternative means for any statements it must provide to non-employees or part-time employees covered under their group health plan.
The final regulations also clarify that Medicaid coverage limited to COVID-19 testing and diagnostic services provided under the Families First Coronavirus Response Act does not qualify as minimum essential coverage for ACA purposes. Thus, such coverage will not prevent an individual from being eligible for a premium tax credit to help pay for Marketplace health coverage.
Finally, despite multiple public commenters asking the IRS to keep good faith transitional relief in place for ACA reporting and filing mistakes, the IRS formally declined to extend that relief. According to the IRS, the good faith relief offered beginning in calendar year 2015 was meant to be transitional as ACA reporting requirements were new and complicated. Reporting requirements have been in place for seven years, so the IRS believes transitional relief is no longer appropriate. Moreover, the IRS and Department of the Treasury believe that the standard reasonable cause exception under the Internal Revenue Code gives ALEs ample relief from applicable penalties for failing to timely or accurately file Forms 1094-C and 1095-C.
This information has been prepared for UBA by Fisher & Phillips LLP. It is general information and provided for educational purposes only. It is not intended to provide legal advice. You should not act on this information without consulting legal counsel or other knowledgeable advisors.