IRS Provides Transition Relief for 2019 ACA Reporting
On Dec. 2, 2019, the Internal Revenue Service (IRS) issued Notice 2019-63 that:
- Extends the due date for furnishing forms under Sections 6055 and 6056 for 2019 from Jan. 31, 2020, to March 2, 2020;
- Extends good-faith transition relief from penalties related to 2019 information reporting under Sections 6055 and 6056; and
- Provides additional penalty relief related to furnishing 2019 forms to individuals under Section 6055. Under this relief, employers will only have to provide Form 1095-B to covered individuals upon request.
Please be aware that these delays relate to the furnishing of forms to individuals only — the due date for filing forms with the IRS for 2019 remains Feb. 28, 2020 (March 31, 2020, if filing electronically).
In addition, on Nov. 13, 2019, the IRS released draft 2019 forms and instructions for reporting under Internal Revenue Code (Code) Section 6056.
Draft 2019 forms 1094-C and 1095-C (and related draft instructions) will be used by applicable large employers (ALEs) to report under Section 6056, as well as for combined Section 6055 and 6056 reporting by ALEs that sponsor self-insured plans. The draft 2019 forms and instructions are substantially similar to the final 2018 versions.
The IRS is encouraging reporting entities to furnish statements as soon as they are able. No request or other documentation is required to take advantage of the extended deadline. Because this extended furnishing deadline applies automatically to all reporting entities, the IRS will not grant additional extensions of up to 30 days to furnish Forms 1095-B and 1095-C. As a result, the IRS will not formally respond to any requests that have already been submitted for 30-day extensions of time to furnish statements for 2019. For more information about the deadlines as well as the good-faith transition relief from penalties, please see our detailed compliance bulletin here.
Proposed Rule on Health Care Transparency to Affect Some Employer Plans
On Nov. 15, 2019, the Departments of Labor (DOL), Health and Human Services (HHS) and the Treasury (Departments) issued a proposed rule regarding transparency in coverage that would impose new transparency requirements on group health plans and health insurers in the individual and group markets. Specifically, the proposed rule would require plans and issuers to disclose:
- Cost-sharing estimates to participants, beneficiaries and enrollees upon request; and
- In-network provider-negotiated rates and historical out-of-network allowed amounts on their websites.
The proposals would only apply to non-grandfathered coverage and to self-insured group health plan sponsors.
This proposed rule was issued in response to an executive order issued on June 24, 2019, aimed at improving price and quality transparency in health care. The order is intended to increase availability of health care price and quality information to protect patients from surprise medical bills. We'll be submitting comments on the proposed rule in the coming weeks and will provide more information when available.
Court Halts San Antonio Paid Sick Leave Law
San Antonio’s paid sick leave law didn't go into effect Dec. 1, 2019, as scheduled because of a temporary injunction granted Nov. 22, 2019. The indefinite stay by the District Court in Bexar County marks the latest action in litigation against the ordinance by a coalition of business owners, joined by the state attorney general.
The original ordinance requiring all employers to provide earned paid sick time to their employees in San Antonio was passed in August 2018. In July 2019, the city agreed to delay implementation of the measure until Dec. 1, 2019, pending amendments to the ordinance, which were passed in October 2019. As part of the amendments, the benefit provided under the law was renamed “sick and safe leave.”
Employers should continue to monitor the status of the ordinance and be prepared to implement its requirements when it takes effect. Employers in Dallas and Austin should also pay attention to this ruling and its potential effect on those cities’ paid leave laws
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