The deadline for employers to provide 2015 Form 1095-C to employees and former employees is tomorrow, March 31, 2016. For help with those last-minute questions, here is a quick summary of the basic requirements — along with a few tips for employers that just cannot meet the deadline.
Applicable large employers (ALEs), who generally are entities that employed 50 or more full-time and full-time-equivalent employees in 2014, are required to report information about the health coverage they offered or did not offer to full-time employees in 2015. The IRS designed a new form, Form 1095-C, that ALEs must provide to each employee or former employee who was a full-time employee for any month in 2015. The ALE also will file copies of all Forms 1095-C with the IRS using transmittal Form 1094-C.
Additionally, an employer of any size that sponsored a self-funded (self-insured) health plan providing minimum essential coverage in 2015 is required to report coverage information about enrollees. To meet this reporting requirement, the employer must furnish Form 1095-B to the primary enrollee and file copies, along with transmittal Form 1094-B, with the IRS. Self-funded employers who also are ALEs may use Forms 1095-C and 1094-C in lieu of Forms 1095-B and 1094-B.
- The deadline for furnishing 2015 Form 1095-C (or Form 1095-B, if applicable) to employees and individuals is March 31, 2016. If mailing, postmark by March 31.
- The deadline for filing the 2015 Forms 1095-C along with transmittal Form 1094-C (or Forms 1095-B with transmittal Form 1094-B, if applicable) with the IRS is:
- If filing by paper, May 31, 2016.
- If filing electronically, June 30, 2016.
These due dates were extended by the IRS for 2015 forms only. In future years, forms will be due on the same due dates as Form W-2 and Form W-3, respectively.
The IRS may access penalties for failure to provide forms on time and/or failure to provide all required information correctly. The penalties can be substantial. For instance, the penalty for a late or incorrect form may be $250 per incidence (to a maximum of $3,000,000).
In accessing penalties for 2015 forms, the IRS will take into account whether the employer made good faith efforts to comply, such as establishing internal processes, gathering data, and collecting information from their third-party vendors. Employers are advised to document all steps they have taken so they can demonstrate their efforts. The IRS has indicated it may consider abating penalties in certain cases for reasonable cause.
In summary, employers should make every effort to provide correct forms by the due date. Generally, the consequences of missing the deadline are more serious than those for providing forms with inadvertent errors. Penalties for reporting errors are reduced if errors are corrected within 30 days.
For more information about the reporting requirements, see the IRS webpage here.