Transitional Relief May Be Transitioning Out
Employers providing health coverage are required in many cases to report annual information returns and statements regarding employee and dependent coverage to the IRS.
Notice 2020-76 provided relief from penalties for certain aspects of the 2020 information-reporting requirements as it relates to incomplete or incorrect information. As long as reporting entities made a good-faith effort to comply with the regulations, they were eligible for this relief. The due date for certain 2020 information-reporting requirements was also previously extended from January 31, 2021, to March 2, 2021. As the intention of this relief was transitional, 2020 is the last year the Treasury Department and the IRS intend to provide this relief. In addition, there is no indication at this time that there will be a similar extension to the January 31 due date in 2022.
The IRS has also announced that whereas there has generally been a 3- year statute of limitations on auditing a taxpayer, there is no statute of limitations for ACA penalties from 2015 filings on.
No discussion has appeared on a ceasing of ACA reporting in the foreseeable future. On the contrary, ACA regulations and penalties appear to be heading in the direction of increasing in scope, complexity and enforcement.
With the focus on healthcare reform by President Biden’s administration, additional funding for healthcare reform in the 2022 fiscal year has been requested. That would allow the IRS more resources to identify ACA non-compliance.
Due to the transition away from penalty relief and potential IRS scrutiny, accuracy in reporting is more important than ever. Audits to check the accuracy of such information could be a timely method of preventing receipt of letters from the IRS, as well as future penalties.
If your organization is unsure of where it stands with respect to ACA reporting compliance, Brinson Benefits, Inc. can perform a free ACA penalty risk assessment to diagnose risk areas in your compliance strategy and get you on track to proactively make corrections before penalties have been assigned.
Questions? Contact your account manager or email acareporting@brinsonbenefits.com.
