IRS Releases 2017 Final Instructions and Forms 1094 and 1095
The Internal Revenue Service (“IRS”) has released final 2017 Forms 1094-B, 1095-B, 1094-C, and 1095-C (“Forms”), which will be used to report in early 2018 on coverage provided during 2017. The IRS also recently released final Instructions for the 2017 Forms in two sets, one set for Forms 1094-B and 1095-B and another set for Forms 1094-C and 1095-C. In this article, we highlight the important changes to the 2017 Forms and Instructions.
Next Attempt at Healthcare Reform Might be Bipartisan Effort
Days after President Trump signed an Executive Order cutting off cost-sharing reductions (“CSRs”) to insurers under PPACA, a bipartisan effort in the Senate is seeking to extend the payments through 2019, broaden state waivers from PPACA’s requirements, and expand the use of catastrophic coverage. Although the bill garnered attention for bringing together 24 Senators from both sides of the aisle, it remains uncertain whether the bill can garner the votes necessary to make it to the President’s desk.
PCORI Fee Increased in Annual Adjustment
In Notice 2017-61, the IRS adjusted the fee imposed by PPACA to fund the Patient-Centered Outcomes Research Institute (“PCORI”). Notice 2017-61 adjusts the PCORI fee to $2.39 per covered life under a policy or plan – up from the previous $2.26 per covered life. The $2.39 per covered life fee applies to policy or plan years that end on or after October 1, 2017 and before October 1, 2018. The PCORI fee is indexed, so it is expected that continued adjustments will be made in future years.
Increased Penalties for Failure to Correctly File Sections 6055 and 6056 Return
PPACA created a number of challenging requirements for employers; among the most difficult and time-consuming are the reporting requirements under Internal Revenue Code Sections 6055 and 6056. Although there has been much speculation and debate on the future of healthcare reform, the requirements for filing and furnishing information returns under Section 6055 and 6056 remain in place. For employers preparing to file in 2018 for health coverage offered in the 2017 calendar year, it is important to note that the IRS has increased the penalties for late filings, failure to file, or incorrect filings of applicable Forms 1094 and 1095. In this article, we review the updated penalty amounts, the types of defective filings that may trigger penalties, and considerations on calculating potential penalties.
Sections 6055 and 6056 Reporting Requirements Toolkit
Our compliance experts have updated our Sections 6055 and 6056 Reporting Requirements Toolkit to reflect the new Forms and Instructions. This valuable set of materials includes a webinar, articles, checklists, and more - all designed to help you meet your reporting reuqirements and be in compliance with confidence. Click the link below to get to the toolkit.
IRS Will Not Accept 2017 Individual Tax Returns Without PPACA Information
For the first time, the IRS will not accept individual tax returns (2017 tax year filed in 2018) that do not address the health coverage requirements under PPACA. In a recent statement to tax professionals, the IRS has announced that it will not accept the electronic tax return until the taxpayer indicates whether they had coverage, had an exemption or will make a shared responsibility payment under the Individual Mandate. In addition, returns filed on paper that do not address the health coverage requirements may be suspended pending the receipt of additional information and any refunds may be delayed. Although the IRS statement does not have a direct impact on employers, employers should ensure that they are prepared to provide Form 1095-C in a timely manner to their employees because Form 1095-C will prove important to their tax return completion.
Questions and Answers for Employers
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