Last week, NAHU sent a letter to the IRS on the proposed draft Forms 1094 and 1095 B & C and their accompanying instructions relating to Section 6055 and 6056 reporting requirements. Our letter thanked the administration for their attempts at simplifying the 2016 forms series and stressed the importance of continuing to simplify the forms and instructions, keeping similar information together, referencing supplemental publications, using “tips” sections, and other improvements to help employers and brokers complete the documents.
Our comments on the forms included:
- Update the reference page to reflect where definitions appear and provide clear cross-reference page numbers.
- Group all information about transition relief under one subheading in the initial section of the forms’ 1094/1095 instructions.
- Provide additional clarification about the safe harbor for employers that exercise multi-employer plan transition relief.
- Provide specific examples on electronic distributions rules, acceptable means of obtaining employee consent, and how employers may effectively document consent for electronic transmissions.
- Regarding 1094-C Question 22, we suggest that transition relief and reporting method should be separated into different questions and reporting lines for the 2016 form. We also suggest one question to document eligibility for all of the different types of transition relief grouped together and another separate question/line to address simplified reporting.
- We recommend that all information about simplified reporting be grouped together in the 2016 instructions under a clear heading.
- Regarding 1094-C Columns B and C, we request additional clarifying guidance on the information required for these columns and its purpose.
- Regarding 1095-C Code 1G, we request grouping information together and concentrating it in the specific 1G coding instruction section.
- Regarding 1095-C Line 16, we suggest the inclusion of a tip section, or more explicit instruction noting that failure to complete line 16 on 1095C means the employer could be subject to a penalty, and expand instructions that specify that line 14 should never be left blank and address all parts of Part II of Form 1095-C.
- Regarding employees covered by military coverage, we believe if individuals received and/or accepted an offer of coverage from a non-military employer than this coverage should be reported and request additional guidance and a clear section in the 2016 1094/1095 form instructions on this topic.
- Rename or better define “Limited Non-Assessment Period.” We recommend including a tip explaining that limited non-assessment period relief only applies if it is followed by a timely minimum value offer of coverage.
- Request guidance for filers who may have made an inadvertent mistake regarding the limited non-assessment period relief in 2015, are realizing their errors now and how an employer should correct this going forward. We recommend the creation of a new indicator code to use where an employer self-insured plan sponsor could indicate that the employer mistakenly relied upon the Limited Non-Assessment Period relief for a prior plan year, which did not actually apply due to a failure to offer coverage on a timely basis.
- We request additional clarification on how to report on employees who waived an offer of coverage by the employer.
- We suggest that all the COBRA information be even more prominently grouped together and that the reference included in the form to additional guidance on IRS.gov be a full, rather than truncated live link.
- We request clear instructions on the new codes to report conditional offers of coverage and request that the treatment of unconditioned opt-out bonuses also be reflected in any new reporting guidance, instructions and forms for 2016.
- We suggest that the 2016 Form 1094 and 1095 instructions include clear examples of what actually triggers the solicitation process for taxpayer identification numbers and what that process should be.
- Regarding mergers and acquisitions, we suggest clarifying guidance providing information about where responsibilities may lie. We also request transition relief for companies that have different plan years, and guidance and transitional relief on various scenarios involving applicable large employers (ALEs) and non-ALEs.
- We request additional information on how to report on individuals who are on extended leaves of absence but are not exercising their rights under the Family Medical Leave Act.
- We recommend that guidance address the confusion over health flex arrangement and health reimbursement arrangement reporting and clarify that even if the flex allowance is a non-health flex allowance that only the portion representing the cost of employee-only coverage should be reported on line 15 of the Form 1095-C, not the full value of the flex allowance.
- Regarding the 2016 reporting timeline, we suggest that the information reporting timeline be advanced by one month moving forward.