Since employers (and insurance carriers) were first required to undertake ACA reporting in 2016 (for the 2015 calendar year), the IRS has followed a fairly consistent pattern with regard to the forms to be used for such reporting:
- First, they issue draft ACA forms and instructions sometime between June and August.
- Second, they finalize those forms by early October.
However, neither of those things has happened yet this year, and it’s not clear why.
Some commentators have expressed concern that it has to do with the demise of the individual mandate penalty, which was eliminated effective January 1, 2019. One of the two key purposes of ACA reporting is to inform the IRS whether an individual had coverage throughout the reporting year so that the agency can verify whether that individual owes a penalty. This is accomplished through the carrier’s issuance of a 1095-B (for fully insured plans) or the employer’s completion of Section III on the 1095-C (for self-insured plans). Since individual penalties are no longer assessed effective January 1, 2019, some commentators have speculated that the IRS could be revising the forms and that could be causing a delay in their release.
While that’s possible, it’s hard to imagine that the IRS would push through substantial changes to the forms this late in the year. Most employers rely on their payroll providers or similar vendors to complete the forms for them electronically. The forms are due to be mailed to employees by January 31 and filed with the IRS by February 28 (or March 31 for electronic filing). Significant changes at this late date would likely result in widespread revolt by employers and vendors unhappy with having to scramble to make last minute changes to their systems.
Nevertheless, there have been rumors that the forms will be changing, and we don’t expect to know more until mid-November at the earliest. We will certainly let you know as soon as we hear one way or the other!