IRS Delays 6055 & 6056 Reporting Deadlines

On Monday the IRS released notice 2016-4 announcing that it is giving employers additional time to file forms associated with sections 6055 and 6056 of the Affordable Care Act.

 

The deadline for employers to electronically file the forms for 2015 which provide coverage information to the IRS was extended to June 30 from March 31, while non-electronic form reporting was delayed to May 31, 2016 from Feb. 29.

 

In addition, the deadline for furnishing employees with 1095-C coverage forms for 2015 was extended to March 31 from Feb. 1.

 

The IRS said in the notice that employers needed “additional time to adapt and implement systems to gather, analyze and report this information.”

 

This delay will be welcomed by employers and their filing partners across the country.

 

To read the notice in its entirety click here.

Key ACA Delays Included in Budget Deal

On Friday the U.S. Senate passed a $1.1 trillion omnibus spending bill and a $650 million tax break package that includes three key delays/moratoriums of taxes and fees associated with the Affordable Care Act.

The most noteworthy of the delays was  two year delay of the 40% excise tax on high-cost plans, commonly known as the Cadillac Tax. The Cadillac Tax, which would be imposed on the portion of group health plan premiums that exceed $10,200 for single coverage and $27,500 for family coverage was set to go into effect in 2018.  This delay postpones the much maligned tax to 2020. The bill also made any amounts paid as a result of the tax, tax deductible.

While the delay is a win for employers, the threat of the tax still looms large and many industry experts don't expect the delay to result in a significant change of course for companies planning to make benefit design changes and tweaks to stay below the tax.

According to the bipartisan nonprofit Committee for a Responsible Federal Budget, delaying the Cadillac tax until 2020 will cost the government $16 billion.

Another welcomed piece of the tax break package was a 2 year moratorium on the medical device excise tax. This tax is a 2.3 percent excise tax that manufacturers and importers must pay on sales of certain medical devices beginning Jan. 1, 2013.  Opponents of the tax argued that it was a hindrance to innovation and research and had a particular negative impact on smaller start up companies that typically have very thin margins in early years of operation.

The delay is estimated to subtract $3.4 billion from the federal budget between 2016 and 2017.

The final delay/moratorium was on the health insurer fee.  The health insurer fee is a tax on health insurance that insurance companies pay on their fully insured blocks of business. The amount of the tax was $8 billion in 2014 and increased by 41 percent for 2015. The tax is scheduled to total more than $145 billion over the next ten years. 

It's estimated that this tax had between  a 3% and 4% impact on fully insured policies over the last two years. Insurance companies will now not have to pay this fee for 2017.