Finance just got a little breathing room from one of the major administrative headaches of early 2017 thanks to the IRS’ latest move.
Specifically, the IRS pushed back the date by which employers have to provide individuals with 2016 Forms 1095-B and 1095-C from Jan. 31, 2017, until March 2, 2017.
As employers are well aware, these ACA reporting forms provide individuals with information about employers’ offers of healthcare coverage as well as details on the coverage provided.
The IRS also extended the good faith penalty relief to the 2016 information-reporting process as well. Earlier this year, the feds said employers would have to show “reasonable cause” to have penalties waived by the feds for 2016 reporting. So this represents a change to that stance.
That’s good news considering the reporting process is tricky enough, and the 2016 reporting forms include some notable differences.
One major example: New spousal coverage indicator codes. The 2016 forms include two new indicator codes – 1J and 1K – on Part II, Line 14 of Form 1095-C.
The two new codes will indicate conditional offers of health care to spouses. A conditional offer to a spouse occurs when a coverage offering is subject to one or more “reasonable” conditions.
Some examples of conditional offers:
- Spouse must certify he or she isn’t eligible for group health coverage through his or her employer, or
- Spouse must certify he or she is not eligible for Medicare.
Other filing deadlines
While the IRS did extend the deadline for furnishing ACA reports to individuals, it hasn’t changed the deadline for getting the reporting info to the feds.
That means the deadline for filing 2016 Forms 1094-B, 1095-B, 1094-B and 1095-C with IRS will remain February 28, 2017, for paper forms and March 31, 2017, for electronic filing.
The IRS also didn’t change anything about the automatic filing extensions some employers can receive; those are still available right now.
The Trump effect
Some employers may be thinking, “With a Trump administration taking charge in January, isn’t Obamacare likely to end anyway? Do we even have to worry about the ACA anymore?” After all, Trump did promise to “repeal and replace,” Obamacare.
In short, an outright repeal is highly unlikely. Many experts agree that gutting the entire law — a law that has completely reshaped our healthcare system over the past six years — would be chaotic and potentially harmful.
Specifically, a repeal would kill the healthcare exchanges and the federal subsidies promised to those individuals who purchased their plans on those very exchanges.
Result: An estimated 20 million Americans would lose their health insurance instantly.
What finance chief can expect instead: A slower phase-out of many of the key reforms in the ACA, replaced with other Trump-administration-led reforms. Some examples cited during Trump’s campaign were:
- the ability to purchase health insurance across state lines,
- letting states manage their own Medicaid fund
- the introduction of special health savings accounts, and
- an allowance for people to deduct the cost of health insurance from their personal income taxes.
Bottom line: Although Trump’s promise to “repeal and replace” Obamacare could happen, it’s going to be a long, slow process and it certainly won’t happen in the immediate future. That means employers should continue to focus on complying with the ACA’s various provisions until the law actually changes.
After all, “I thought this was getting repealed” probably isn’t the type of excuse that’ll get the feds to waive non-compliance penalties.