On December 16, 2015 Internal Revenue Service officials provided additional answers related to the Patient Protection and Affordable Care Act (PPACA), better known as ‘Obamacare’, with regard to employer relief from penalties if errors are reported in the first wave of 1095-C coverage reporting.
Applicable large employers are supposed to transmit form 1095-C’s to their current and former employees by March 31, or get an extension and send notices by the end of the extension period. PPACA imposes stiff penalties on employers that violate the 1095-C requirements, but the IRS has said that it will not impose penalties on employers that get the notices out on time and show they made ‘a good faith effort’ to follow the rules despite mistakes in the notification information.
In IRS Notice 2015-87, IRS Officials have issued clarifications regarding issues like ‘good faith effort’ and even what will happen if employers miss the 1095-C deadline. For example employers can still get penalty relief if they have ‘reasonable cause’ for getting the notices out late. Additional IRS clarifications cover ‘cafeteria plans’, ‘health reimbursement arrangements’, and ‘flexible spending arrangements’.
For more details see the official IRS Notice.