IRS Grants Permanent Extension to ACA Reporting Deadline

The IRS has issued final regulations granting a permanent, automatic extension of time to comply with the Affordable Care Act (ACA) reporting requirements. Employers, health insurance issuers, and governmental plans have additional time—not to exceed 30 days after January 31— in which to provide Forms 1095-B or 1095-C to individuals. If the extended due date falls on a weekend or legal holiday, statements are due on the next business day. The extended deadline is effective for calendar years beginning after December 31, 2021. 

In addition, the regulations provide guidance on the following.

Medicaid Coverage Limited to COVID Services.  Medicaid coverage that is limited to COVID testing and diagnostic services is not minimum essential coverage under a government-sponsored program. Individuals covered under this type of plan may still qualify for premium tax credits. This provision is effective September 28, 2020.

Additional Extensions Not Available. Reporting entities are not permitted to request an additional extension to provide Forms 1095-B or 1095-C beyond the automatic 30-day extension. A reporting entity may seek to qualify for penalty relief by showing a failure to file was due to reasonable cause and not willful neglect.

Elimination of Transitional Good Faith Relief. For calendar years 2015 through 2020, the IRS did not impose penalties on reporting entities if they could show that they made good faith efforts to comply with the ACA reporting requirements. The final regulations reiterate that transitional good faith relief is not applicable to the 2021 calendar year and will not be available in the future. 

Filings Submitted to the IRS.  Reporting entities are also required to submit an information return and transmittal form to the IRS on or before February 28 for paper submissions (March 31 if filed electronically) of the year following the calendar year. This deadline has not been extended.

These final regulations provide welcome news to reporting entities who are in the beginning stages of preparing to comply with the 2022 reporting requirements.