The IRS has extended the deadline for employers to provide participants in their group medical plans with their 2020 individual participant information statements.
Under the Affordable Care Act (ACA), employers that are “applicable large employers” (generally, those with 50 or more full-time employees/full-time equivalent employees in the previous year) that maintain a group medical plan, as well as employers of any size that maintain a self-insured group medical plan, are required to file information returns with the IRS and to provide related individual information statements to plan participants.
Under existing regulations, for each calendar year, the deadline for the participant statements is the following Jan. 31, and the deadline for the IRS filing is the following Feb. 28 (March 31 if filed electronically). The regulations also provide for an available automatic 30-day extension for the IRS filing deadline (by filing Form 8809, “Application for extension of time to file information returns”), as well as a conditional 30-day extension available for both deadlines upon a showing of good cause.
In recently issued Notice 2020-76, the IRS announced that for purposes of the 2020 ACA employer reporting requirements:
- The Jan. 31, 2021, participant information statement deadline is extended to March 2, 2021, and there will be no additional extensions available.
- The Feb. 28/March 31, 2021, IRS information return deadline is not extended; however, the automatic and conditional 30-day extensions will continue to be available.
What does CohnReznick think?The IRS extended the deadline for individual participant statements by 30-60 days for each of 2015 through 2019, with the result that the extension for 2020 comes as no surprise. However, after the ACA individual mandate penalty amount was reduced to zero (for 2019 and after), the IRS began to publicly question whether a post-Jan. 31 participant statement extension continues to be warranted. Consequently, in 2019, the Treasury and the IRS requested public comments as to why annual ACA participant statement extensions beyond Jan. 31 would be needed for future years. In the Notice, the IRS says that “very few” public comments were received, and that unless they receive comments as to why post-Jan. 31 deadlines should apply to future years, there will be no post-2020 reporting extensions. The IRS’s position in this regard will obviously be impacted by any future increase to the individual mandate penalty percentage.
Subject matter expertise
JD, LLM, Managing Director - National Tax Services
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