On October 2nd, the Internal Revenue Service issued a Notice that extends the deadline for large employers (usually 50 or more full-time equivalent employees in the previous year) and self-insured group health plans to distribute Forms 1095-C to employees and plan participants. This guidance is nearly identical to the relief provided for the 2019 tax year. The normal deadline to distribute Forms 1095-C is January 31st. This IRS Notice delays the deadline for distributing the 2020 forms until March 2, 2020. Due to this automatic extension, the IRS will not be granting additional 30-day extensions upon request. Therefore, employers must ensure that they distribute their Forms 1095-C to all full-time employees and participants in their self-funded plans no later than March 2nd.
Consistent with the relief provided in prior years, the IRS is not extending the date for filing Form 1094-C and copies of Forms 1095-C with the IRS. For employers that are filing electronically, this deadline is March 31, 2021, and for employers who are filing in paper form (which is only permissible if you are filing 250 or fewer Forms 1095-C), the deadline is February 28, 2021.
The IRS also extended the new transition relief provided last year due to the Tax Cuts and Job Act reducing the individual shared responsibility payment to zero beginning in 2019. The IRS will not enforce the failure to report penalties against self-insured employers if Forms 1095-C are not sent to individuals that are not full-time employees (e.g., part-time employees, retirees). This relief is limited, and the IRS is still requiring Forms 1095-C to be sent to full-time employees. Further, the relief is only allowed if the employer posts a notice prominently on its website and furnishes Form 1095-C to any individual upon request within 30 days. Forms 1095-C must still be submitted to the IRS for all individuals in the plan, so the only real benefit from this relief would be the money saved from not mailing the forms to non-full-time participants.