December 31, 2015 § Leave a comment
The Affordable Care Act, commonly referred to as the ACA or Obamacare, will turn six years old this March. Sometimes it feels that the law is older than that considering the amount of discussion and scrutiny the act has received. It is safe to say it has not been the smoothest ride for this historic piece of legislation.
The ACA has endured delays to numerous provisions over the years, and most of the delays have been favorable to businesses, allowing them additional time to implement the legislation. The IRS delivered another gift for businesses on December 28, 2015 with Notice 2016-4. This notice delays the due dates for companies to file and furnish forms 1095-B, 1095-C, 1094-B, and 1094-C under ACA Sections 6055 and 6056 for applicable large employers with generally 50 or more full-time employees.
Form 1095-B is designed to provide a summary of the minimum essential health insurance coverage offered during 2015. The filing requirement helps confirm that employers are providing health insurance coverage that meets the minimum standards under the ACA. These forms will generally be prepared by health insurers or employers who chose to self-insure.
Form 1095-C will be used to report to full-time employees the health coverage that was offered by their employer during 2015. The forms provide information to employees confirming if the coverage offered meets the affordability provisions under the ACA. The applicable large employers are responsible for furnishing these forms to full-time equivalent employees.
Forms 1094-B and 1094-C are transmittal forms used to provide information to the IRS related to the information provided on the 1095-B and 1095-C forms. These transmittal forms are similar to form 1096, which is generally used as an annual summary of information returns filed which includes the form 1099 series.
Notice 2016-4 has extended the due date for providing forms 1095-B and 1095-C to individuals from February 1, 2016 to March 31, 2016. The notice also delays the due date for filing forms 1094-B, 1094-C, 1095-B, and 1095-C with the IRS from February 29, 2016 to May 31, 2016. Those who provide forms electronically have until June 30, 2016 to file with the IRS. These extended due dates are automatic and no separate form is required to extend the filings.
These delays will help businesses who are traditionally busy in January with other year-end reporting such as 1099’s and W-2’s to push the ACA forms back if needed. Businesses are still encouraged to complete the filings as soon as possible to avoid filing delays. The forms provided to individuals will also be used in the preparation of their individual tax returns when completing any necessary forms under the ACA.
Penalties may apply if businesses fail to file the required ACA forms by the extended due dates under Notice 2016-4. The IRS has previously reported it will avoid penalizing businesses that make a good faith effort to comply with the new reporting requirements even if the information reported may contain mistakes or misinformation. These new delayed due dates provide even more time to complete the filings and avoid the$250 per return/statement penalty for failure to file.
The ACA reporting delay is a win for businesses, but this is still unchartered water, and the reporting may require significant additional time and resources to comply. I would encourage companies to not delay starting the process and to consult with outside advisors when applicable to comply with the new reporting deadlines.
Nathan Beck, CPA
Manager – McGowen, Hurst, Clark & Smith, P.C.
December 18, 2015 § Leave a comment
In October, I attended my 45th high school class reunion. I know I have just confirmed my advanced age, but I’m pretty sure most of you had that figured out anyway. I graduated from Winterset High School in May 1970 with a class of about 115. My class is pretty typical of those in many small- town rural Iowa communities. While not large compared to many school districts, it was large enough to provide some diversity, but still small enough for many of us to know each other well.
As always, several of our classmates who live close by chose not to attend this year’s reunion, but there is a core group of 40 to 50 that enjoy the events and are faithful to attend every five years. This particular year, we were especially thrilled to have Peter, our foreign exchange student from Germany, who is now a doctor, attend the reunion.
Personally, I have always enjoyed the reunions. They provide an opportunity to see old friends, share memories and stories (mostly true), and laugh a lot. Like most classes, those who attend have largely moved past old grudges and insecurities and enjoy classmates for who they are now, without dwelling on who they used to be. We enjoy the opportunity to spend time with others who share similar backgrounds and upbringings.
Time moves quickly and much has changed since 1970, but after a reunion I am reminded of something that does not change. All of my classmates, good friends or not, are part of my past. Many have impacted who I am today, and we share a common bond. Experiences, good and bad, shape us for future careers and relationships. That will not change.
I look forward to our 50th. Lord willing, I will be there.
Jim Smith, CPA
Partner – McGowen, Hurst, Clark & Smith, P.C.