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Federal Register / Vol. 86, No. 231 / Monday, December 6, 2021 / Proposed Rules
responsible individuals and employees, under section 6055c2 and 6056c2, and 1.60551g4iA and 1.6056
1g1i, is difficult to meet.
Commenters noted that the process by which reporting entities compile accurate health coverage offer and enrollment information is complex and often takes more time than the current January 31 deadline allows. Employers are required to compile offer and enrollment information for large numbers of employees, sometimes from multiple systems, verify the accuracy of the information, and transmit the information to vendors so that the statements can be timely issued to individuals. Commenters further indicated that, while health coverage information is tracked throughout the year, accurate reporting on Forms 1095
B and 1095C includes data and information from the month of December, which necessarily requires employers to spend substantial time after the close of the year compiling and verifying data. A number of commenters stated that the data and information necessary to prepare the forms is not available until mid-January and that the period required to prepare and mail the large numbers of forms can take from three to seven weeks.
Commenters also pointed out that the January 31 deadline for furnishing Forms 1095B and 1095C to individuals may make it difficult for employers to make changes to their benefit plans near the end of the calendar year. Commenters further noted that the January 31 deadline coincides with the due dates of other government forms, including Form W
2, Form 1099NEC, Form 941 for the fourth quarter, and annual Forms 940
and 945. One commenter wrote that the substantial time necessary to complete Forms 1095B and 1095C is attributable to the fact that the information required depends upon detailed employer and employee activities. The commenter stated that, in some cases, employers must undertake a day-by-day or person-by-person assessment, which may lead to varied individual results in the codes that are required to be entered on the forms.
These factors, the commenter noted, make the Forms 1095B and 1095C
meaningfully distinguishable from other information returns on which aggregate dollar amounts are reported for the yearfor example, Form W2without regard to day-by-day activity.
Some of the commenters indicated that, if a more permanent automatic extension of the January 31 furnishing deadline is not provided for future reporting, entities will annually request
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additional time to produce and mail accurate Forms 1095B and 1095C
pursuant to the current extension procedures. The result would be that the IRS would need to process a significant number of extension requests each year.
a. Extension of Deadline for Furnishing Statements Under Section 6055
To reduce administrative burdens for reporting entities and the IRS, the Treasury Department and the IRS have determined that the furnishing requirements under 1.60551g should be modified by providing an automatic extension of time for reporting entities to furnish statements to responsible individuals. This proposed amendment to the regulations under section 6055 is consistent with Notice 202076.
Under these proposed regulations, 1.60551g4i is proposed to be amended to provide that reporting entities are granted an automatic extension of time, not to exceed 30 days, in which to furnish the written statements required by 1.60551g.
Because this extension is automatic, the proposed regulations eliminate the requirement in 1.60551g4iB1
that a reporting entity make a written application to the IRS showing good cause to request an extension of time to furnish the statement. Under this proposed amendment to the regulations, statements Forms 1095B furnished to responsible individuals will be timely if furnished no later than 30 days after January 31 of the calendar year following the calendar year in which minimum essential coverage is provided. If the extended furnishing date falls on a weekend day or legal holiday, statements will be timely if furnished on the next business day. See section 7503. The automatic 30-day extension would replace both the 30day extension for good cause in 1.60551g4iB1 and the authorization for the Commissioner to provide automatic extensions in 1.60551g4iB2.
b. Alternative Manner of Furnishing Statements Under Section 6055
Notice 202076 indicates that, because the TCJA reduced the individual shared responsibility payment amount to zero for 2020, responsible individuals do not need the information on Form 1095B to prepare and file their individual returns.
Nonetheless, reporting entities required to furnish Forms 1095B must expend resources to do so. In light of those factors, the Treasury Department and the IRS determined that relief from the penalty under section 6722 for failing to
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furnish a statement Form 1095B
required under section 6055 for 2020
was in the interest of sound tax administration in certain cases. Thus, Notice 202076 provided that the IRS
would not assess a section 6722 penalty against a reporting entity for failing to furnish Form 1095B to responsible individuals for 2020 in cases when two conditions were met 2020 section 6055
furnishing relief. First, a reporting entity was required to post a notice prominently on its website stating that responsible individuals may receive a copy of their 2020 Form 1095B upon request, accompanied by an email address and a physical address to which a request may be sent, along with a telephone number that responsible individuals may use to contact the reporting entity with any questions.
Second, a reporting entity was required to provide a 2020 Form 1095B to a responsible individual upon request within 30 days of the date the request was received. A reporting entity could furnish the statements to responsible individuals electronically if the requirements of 1.60552 were satisfied.
Because of the combined reporting by ALE members under sections 6055 and 6056 on Form 1095C for full-time employees of ALE members enrolled in self-insured health plans, the 2020
section 6055 furnishing relief was not extended to the requirement to furnish Forms 1095C to full-time employees.
The 2020 section 6055 furnishing relief, however, applied to penalty assessments related to the requirement to furnish Form 1095C to a part-time employee enrolled in an ALE members self-insured plan for any month in 2020, subject to the two requirements of the 2020 section 6055 furnishing relief.
Finally, the 2020 section 6055
furnishing relief did not extend to the assessment of penalties relating to failures to file the 2020 Forms 1094B
or 1095B or the Forms 1094C or 1095C, as applicable, with the IRS.
In response to Notice 202076, a number of health plan providers, governmental agencies, and associations requested that the 2020 section 6055
furnishing relief be made permanent or extended at least for the time periods when the individual shared responsibility payment amount is zero.
These commenters echoed the considerations identified in Notice 202076 supporting the 2020 section 6055 furnishing relief. Namely, commenters pointed to the high costs associated with producing and mailing Forms 1095B although individuals have no need for the information on the Form 1095B to correctly compute
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