The death of the Affordable Care Act may have been exaggerated, but some provisions, like the shared responsibility payment, have effectively been killed off. Beginning in the 2019 tax year (that’s the return you’ll file in 2020), there will be no individual shared responsibility payment for taxpayers who fail to maintain minimum essential coverage. However, requirements for employers to report coverage remain firmly in place – but relief is on the way.

Confused? Here’s what you need to know.

As part of the Tax Cuts and Jobs Act (TCJA), the individual shared responsibility payment has been reduced to zero for months beginning after December 31, 2018. In other words, there’s no shared responsibility payment (sometimes called the healthcare penalty) for the 2019 tax year. However, the TCJA did not address reporting requirements for employers. As a result, the Internal Revenue Service (IRS) indicated in Notice 2018-94 (downloads as a PDF) that they would take a look at how the reporting requirements should change, if at all. 

This year, in Notice 2019-63 (downloads as a PDF), the IRS has indicated that it will not assess a penalty under section 6722 to employers or other reporting entities who fail to report particular coverage. Specifically, the IRS will not impose penalties for those who do not issue a Form 1095-B to responsible individuals if two conditions are met:

  1. The employer (or entity) must post a notice prominently on its website stating that a copy of the 2019 Form 1095-B is available upon request. The announcement has to provide an email address and a physical address that can be used to request the form and a telephone number for any questions. 
  2. The employer (or entity) must furnish the form within 30 days after the request is received. 

Applicable large employers (ALE) or ALE members may still have reporting requirements. The relief does not extend to the requirement to furnish Forms 1095-C to full-time employees: penalties will continue to be assessed for any failure by ALE members to provide Form 1095-C, including Part III. Some exceptions apply.

The IRS is also giving employers two more months to get the paperwork to employees. The notice extends the due date for employers to furnish the 2019 Forms 1095-B and 1095-C, from January 31, 2020, to March 2, 2020. However, the notice does not extend the due date for filing the 2019 Forms 1094-B, 1095-B, 1094-C, or 1095-C with the IRS; automatic extension remains available under the standard rules for those who submit a Form 8809 on or before the due date.

Finally, relief is also available for employers who report incorrect or incomplete filing information (like missing or wrong taxpayer identification numbers and dates of birth) so long as they make a good-faith effort to comply by the March deadline.

The IRS will continue to examine the rules for future years. If you have comments, you can submit them electronically via the Federal eRulemaking Portal at www.regulations.gov (type “IRS2019-XX” in the search field on the regulations.gov homepage to find this notice and submit comments). You can also mail comments to Internal Revenue Service, Attn: CC:PA:LPD:PR (Notice 2019-XX) Room 5203, P.O. Box 7604, Ben Franklin Station, Washington, D.C. 20044. Remember that all comments will be available for public inspection.

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Author

Kelly Erb is a tax attorney and tax writer.

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