The IRS has extended the deadline for employers to furnish individuals the 2018 Form 1095-B, Health Coverage, and the 2018 Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, from Jan. 31, 2019, to March 4, 2019.
The IRS also extended the good-faith transition relief from Section 6721 and 6722 penalties to the 2018 information-reporting requirements under Sections 6055 and 6056 of the IRS Code.
The due dates for employers filing the 2018 Forms 1094-B, 1095-B, 1094-C and 1095-C with the IRS remains Feb. 28, 2019, if not filing electronically, or April 1, 2019, if filing electronically.
Starmark has provided a spreadsheet, available in the Document Center, that employers may use to help them with compiling the data needed for the forms. For help with completing the forms or filing with the IRS, see your accountant, tax adviser and/or payroll services company.
Starting this week, employers with a self-funded health benefit plan administered by Starmark will receive a letter via mail if Social Security numbers (SSNs) for any employee dependents are missing. This will help with the employer’s 2019 Affordable Care Act 6055/6056 reporting requirements by letting them know if we are missing SSNs for any covered dependents. The broker of record will receive a copy of the letter sent to their group(s).
If employees have covered dependents in 2018 with missing SSNs or add a dependent later with a missing SSN, employers can log in to the Starmark website and update the information under Manage My Group > Dependent SSN Update. The initiative by an employer to obtain and update all missing information will help ensure that the January 2019 report available in the Document Center will be as complete as possible.
Employers are responsible for collecting pertinent information and filing the appropriate documents with the IRS for all employees. Employers should consult a professional benefit adviser or legal counsel regarding how the law may impact their business and specific self-funded health benefit plan.
View a sample letter.
Over the next few days, Starmark® clients with a self-funded health benefit plan design that are required to pay the Patient-Centered Outcomes Research Institute (PCORI) fee will receive a letter via mail providing their group’s “average covered lives” during the plan year ending in 2017 (using the Snapshot Count method).
As a courtesy, the Broker of Record will receive a duplicate copy of the letter sent to their group(s). The letter will also be posted to the Document Center on the Starmark website for the employer, the Broker of Record and the broker’s managing general agent to view.
The Affordable Care Act and associated regulations require health insurance issuers and plan sponsors of self-funded group health plans to file and pay an annual PCORI fee.
Plan sponsors of self-funded health plan years ending in 2017, are required to pay the fee to the IRS and file Form 720 by July 31, 2018.
Click here to view a sample letter.
The U.S. Department of Health and Human Services (HHS) has set the 2019 in-network out-of-pocket maximum for Essential Health Benefits for group health plans at $7,900 for self-only coverage and $15,800 for other-than-single coverage, an increase of 7 percent from 2018.
The 2018 maximum annual limitation on cost-sharing is $7,350 for self-only coverage and $14,700 for other-than-single coverage.
HHS announced the new out-of-pocket maximums in the 2019 Notice of Benefit and Payment Parameters final rule, which was released on April 9, 2018. The cost-sharing limitations apply to nongrandfathered plans.
As part of the legislation to end the federal government shutdown, the President signed into law a bill that affects certain provisions of the Affordable Care Act (ACA).
- Delays the Cadillac Tax until 2022: The Cadillac Tax, which previously was scheduled to take effect in 2020, will now take effect in 2022. The ACA imposes a 40 percent excise tax, known as the Cadillac tax, on the cost of coverage of an employer-sponsored plan exceeding $10,200 for single coverage and $27,500 for family coverage.
- Establishes a Health Insurance Provider Fee Moratorium in 2019: The fee will not be collected in 2019. The fee is effective for 2018, but was not collected for 2017. Self-funded health benefit plans are not affected by this fee.
The IRS has extended the deadline for distributing Form 1095 to employees as mandated by reporting requirements under the Affordable Care Act. Applicable sponsors of self-funded health plans that are required to provide Form 1095 to their employees now have until March 2, 2018, rather than Jan. 31, 2018. No extension was provided for filing the Form 1094 Transmittal and Form 1095 with the IRS which remains Feb. 28, 2018, for paper filers or April 2, 2018, for electronic filers. Electronic filing is required for parties filing 250 or more forms.
The IRS also indicated that transitional relief from penalties has been extended to reporting entities that can show that they have made good-faith efforts to comply with the information-reporting requirements under sections 6055 and 6056 for 2017 both for furnishing to individuals and for filing with the IRS with incorrect or incomplete information. This relief applies to missing and inaccurate taxpayer identification numbers and dates of birth, as well as other information required on the return or statement. No relief is provided to reporting entities that fail to file an information return or furnish a statement by the extended due date.
Starmark® has provided a spreadsheet, available in the Document Center, that employers may use to help them with compiling the data needed for the forms. For help with completing the forms or filing with the IRS, see your accountant, tax adviser and/or payroll services company.
The Internal Revenue Service has provided answers to common questions about the employer mandate and potential penalties.
Here are recently released questions with summarized answers:
Q: How does an employer know that it owes an employer shared responsibility payment?
A: The general procedures the IRS will use to propose and assess the employer shared responsibility payment are described in Letter 226J. The IRS plans to issue Letter 226J to an applicable large employer if it determines that, for at least one month in the year, one or more of the applicable large employer’s full-time employees was enrolled in a qualified health plan for which a premium tax credit was allowed (and the applicable large employer did not qualify for an affordability safe harbor or other relief for the employee).
Q: Does an employer that receives a Letter 226J proposing an employer shared responsibility payment have an opportunity to respond to the IRS about the proposed payment, including requesting a pre-assessment conference with the IRS Office of Appeals?
A: Yes. Applicable large employers will have an opportunity to respond to Letter 226J before any employer shared responsibility liability is assessed and notice and demand for payment is made. Letter 226J will provide instructions for how the applicable large employer should respond in writing, either agreeing with the proposed employer shared responsibility payment or disagreeing with part or all or the proposed amount.
Q: How does an employer make an employer shared responsibility payment?
A: If, after correspondence between the applicable large employer and the IRS or a conference with the IRS Office of Appeals, the IRS or IRS Office of Appeals determines that an applicable large employer is liable for an employer shared responsibility payment, the IRS will assess the employer shared responsibility payment and issue a notice and demand for payment, Notice CP 220J.
Q: When does the IRS plan to begin notifying employers of potential employer shared responsibility payments?
A: For the 2015 calendar year, the IRS plans to issue Letter 226J informing applicable large employers of their potential liability for an employer shared responsibility payment, if any, in late 2017.
Follow this link to the IRS FAQ about the employer mandate.
Follow this link to review the complete answers to recently released questions about the employer mandate and potential penalties. (Questions 55 through 58)
For more information about the employer mandate, read our two-page overview of the employer mandate or our in-depth guide to understanding the provision. Both have been updated to provide the most current information and are available in the Healthcare Reform Toolkit.