Deadlines Extended for Furnishing Forms 1095-B and 1095-C in Early 2017

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The IRS has extended the due dates for furnishing 2016 Forms 1095-B and 1095-C to covered individuals and full-time employees, respectively, from January 31, 2017, to March 2, 2017. In addition, the IRS is also extending good faith penalty relief to reporting entities who can show they made good faith efforts to comply with the calendar year 2016 information reporting requirements.

 
Who is Required to Report
Applicable large employers (generally those with 50 or more full-time employees, including full-time equivalents or FTEs) must use Forms 1094-C and 1095-C to report information to the IRS and to their full-time employees about their compliance with the employer shared responsibility provisions (“pay or play”) and the health care coverage they have offered in a calendar year. Alternatively, Forms 1094-B and 1095-Bare used by insurers, self-insuring employers, and other parties that provide minimum essential health coverage (regardless of size, except for large self-insuring employers) to report information on this coverage to the IRS and to covered individuals. Employers subject to both reporting provisions (generally self-insured employers with 50 or more full-time employees, including FTEs) will satisfy their reporting obligations using Forms 1094-C and 1095-C.

Note: Reporting entities are required to report in early 2017 for coverage offered (or not offered) in calendar year 2016.

Furnishing Deadline Extension
The IRS has extended the due dates for furnishing 2016 Forms 1095-B and 1095-C to covered individuals and full-time employees, respectively, from January 31, 2017, to March 2, 2017. However, the deadline to file 2016 Forms 1094-B, 1095-B, 1094-C, and 1095-C with the IRS was not extended, and remains February 28, 2017 (or March 31, 2017, if filing electronically).

Good Faith Penalty Relief Extension
Internal Revenue Code sections 6721 and 6722 impose penalties for failing to file and furnish an accurate and complete information return, including Forms 1094 and 1095. However, the IRS is extending penalty relief to reporting entities that can show that they made good faith efforts to comply with the calendar year 2016 information reporting requirements. 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.

In determining good faith, the IRS will take into account whether an employer made reasonable efforts to prepare for reporting the required information to the IRS and furnishing it to employees and covered individuals, such as gathering and transmitting the necessary data to an agent to prepare the data for submission to the IRS, or testing its ability to transmit information to the IRS. In addition, the IRS will take into account the extent to which the employer is taking steps to ensure that it will be able to comply with the reporting requirements for calendar year 2017.

Extensions Apply to Calendar Year 2016 Reporting Only
The extensions for furnishing Forms 1095-B and 1095-C apply to calendar year 2016 reporting only and have no effect on the requirements for other years or on the effective dates or application of the pay or play provisions. Specifically, the IRS does not anticipate extending due dates or good faith penalty relief to reporting for calendar year 2017.

Be sure to visit our Health Care Reform section to stay on top of the latest Affordable Care Act updates.

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    Effective December 1, a new rule updates the regulations governing which executive, administrative, professional, and highly compensated employees are entitled to the minimum wage and overtime pay protections of the federal Fair Labor Standards Act (FLSA).

    Current Rules
    The current federal rules provide an exemption from both the minimum wage and overtime pay requirements of the FLSA for bona fide executive, administrative, and professional employees who meet certain tests regarding their job duties and who are paid on a salary basis at not less than $455 per week ($23,660 per year). “Highly compensated employees” (HCEs) who are paid total annual compensation of $100,000 or more and meet certain other conditions are also deemed exempt.

    New Rule
    The new rule updates the salary and compensation levels needed for executive, administrative, professional, and highly compensated employees to be exempt. In particular, the final rule:

    Note: When both the FLSA and a state law apply, the employee is entitled to the most favorable provisions of each law.

    Our Fair Labor Standards Act section features additional information on exemptions from the law’s minimum wage and overtime requirements.

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    The Internal Revenue Service (IRS) has released the final forms and instructions for Forms 1094 and 1095 for calendar year 2016 reporting. Employers are required to report in early 2017 for calendar year 2016.

    2016 Forms and Instructions
    The following calendar year 2016 reporting forms and instructions are now available:

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    Employers sponsoring certain self-insured plans that use a third-party administrator in connection with claims processing, claims adjudication, and enrollment functions (“contributing entities”) must submit their 2016 Annual Enrollment and Contributions Submission Form and schedule a payment for the 2016 benefit year no later than November 15.

    Reinsurance Contribution Process
    To successfully complete the reinsurance contribution process, contributing entities (or third-party administrators or administrative services-only contractors on their behalf) must register on Pay.gov (or confirm a password if such entities registered for the previous benefit years of the program) and submit their annual enrollment counts of the number of covered lives of reinsurance contribution enrollees for the 2016 benefit year using the 2016 form.

    2016 Contribution Amounts
    The 2016 reinsurance contribution rate is $27.00 per covered life. For the 2016 benefit year, contributing entities have the option to pay:

    Our Transitional Reinsurance Program section features additional information on the reinsurance contribution process.

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    The Internal Revenue Service (IRS) has announced the inflation-adjusted contribution limits for health savings accounts (HSAs) and health flexible spending arrangements (health FSAs) for tax year 2017.

    2017 Contribution Limits
    The tax year 2017 contribution limits for HSAs and health FSAs are as follows:

    For more information, please see IRS Revenue Procedures 2016-28 and 2016-55.

    Visit our HSAs, FSAs, and Other Tax-Favored Accounts section for more on HSAs and health FSAs.

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    With Election Day quickly approaching, private sector employers should be aware of their obligations under state law to provide voting leave for their employees.

    While there is no federal law that requires private sector employers to provide employees with time off from work to vote in a national or state election, numerous states require that private sector employees be provided with either unpaid or paid time off to vote.

    The chart below summarizes the general voting leave requirements of all 50 states and the District of Columbia:


    Note: Many states have additional rules regarding time off to vote. Employers are strongly advised to review the applicable state law and contact a knowledgeable employment law attorney for further guidance.

    To review the voting leave requirements specific to your state, please visit our interactive map.

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