IRS Releases Draft 2019 Forms 1094 and 1095 and Related Instructions

The IRS has released draft Forms 1094/1095-B (B Forms) and Forms 1094/1095-C (C Forms), and related instructions, for the 2019 tax year. As a reminder, the B Forms are filed by minimum essential coverage providers (mostly insurers and government-sponsored programs, but also some self-insuring employers and others) to report coverage information in accordance with Code § 6055. The C Forms are filed by applicable large employers (ALEs) to comply with Code § 6056, providing information that the IRS needs to administer employer shared responsibility under Code § 4980H and eligibility for premium tax credits. In addition to being filed with the IRS, Forms 1095-B and 1095-C are furnished to individuals. ALEs with self-insured health plans report coverage information on Form 1095-C.

Few changes are proposed for 2019. Both sets of instructions have deleted statements that the IRS needs coverage information to determine whether individuals are liable for an individual shared responsibility penalty. (That penalty was reduced to zero starting in 2019—see our Checkpoint article). Similarly, the instructions for recipients of Forms 1095-B and 1095-C indicate that individual shared responsibility penalties do not apply in 2019, but note that certain types of minimum essential coverage affect eligibility for premium tax credits. The Plan Start Month box will still be optional on Form 1095-C for 2019, and the multiemployer plan interim guidance will still apply—but the IRS continues to warn that these provisions may change in the future. The Form 1095-C instructions note that the Code § 4980H(b) affordability threshold for plan years beginning in 2019 is 9.86% (see our Checkpoint article). Per-return penalty amounts for reporting failures are unchanged at $270, but the calendar-year maximum penalties reflect indexed increases to $3,339,000.

The due dates have been updated. Statements are due to individuals by January 31, 2020. IRS filing deadlines are February 28, 2020, for paper filings and March 31, 2020, for electronic filings. Both sets of draft instructions continue to explain that the 250-return threshold that triggers mandatory electronic filing with the IRS applies separately for each type of form and for original and corrected returns.

The IRS has also updated several publications of interest to those filing Forms 1094/1095 electronically, including—

• Publication 5164 (Test Package for Electronic Filers of Affordable Care Act (ACA) Information Returns (AIR) (Processing Year 2020));
• Publication 5165 (Guide for Electronically Filing Affordable Care Act (ACA) Information Returns for Software Developers and Transmitters) (Processing Year 2020); and
• Publication 5258 (Affordable Care Act (ACA) Information Returns (AIR) Submission Composition and Reference Guide)

These resources and other important information can be found on the regularly updated IRS Affordable Care Act Information Returns (AIR) webpage.

EBIA Comment: The 2019 draft forms and instructions were released much later than in prior years. Given the lack of substantive changes, the reason for the delay is unclear—but filers are likely to appreciate at least one more year of stability in the reporting requirements. Also, although the individual responsibility penalty has been reduced to zero, the employer shared responsibility penalties remain in force and are adjusted for inflation. An IRS webpage notes that, for 2019, the annual Code § 4980H(a) penalty is $2,500, and the annual Code § 4980H(b) penalty is $3,750. Those amounts will increase to $2,570 and $3,860, respectively, for 2020. For more information, watch for updates to EBIA’s Form 1094/1095 Workbook at Sections VII (“Form 1094-C: Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns”) and VIII (“Form 1095-C Report/Employee Statement: Employer-Provided Health Insurance Offer and Coverage”). See also EBIA’s Health Care Reform manual at Sections XXXVI.C (“Information Reporting of Minimum Essential Coverage (Insurers and Employers That Self-Insure)”) and XXXVI.D (“Information Reporting of Employer-Sponsored Coverage (Applicable Large Employers)”). You may also be interested in our upcoming webinar “1094/1095 Reporting for 2019” (live on 12/4/2019).

Contributing Editors: EBIA Staff.