United States: Affordable Care Act: Extensions, Delays And Guidance As 2015 Ends

The last half of December saw a flurry of activity with respect to the Affordable Care Act. In the last week of 2015, the Department of the Treasury and the IRS extended the date by which employers and insurers have to comply with the ACA's information reporting requirements. Earlier in December, President Obama signed the Protecting Americans from Tax Hikes (PATH) Act, which, among other things, provides for a delay of the excise tax imposed on high cost health plans, commonly referred to as the "Cadillac Tax," and the Department of the Treasury, the Department of Labor and the Department of Health and Human Services (the "Departments") issued Notice 2015-87, which provides guidance on a number of ACA-related topics.

Notice 2016-4: Extension of Due Date for ACA Information Reporting

On December 28, the Department of the Treasury and the IRS issued Notice 2016-4, which extends the due dates for the 2015 information reporting requirements under sections 6055 and 6056 of the Internal Revenue Code. The reports required under section 6055 provide information to individuals that allows them to indicate on their income tax returns whether they are enrolled in minimum essential coverage. The reports required under section 6056 provide the IRS with information to enable it to determine whether employers are offering coverage in accordance with the employer shared responsibility provisions of the ACA.

The Notice extends the due dates:

  • for furnishing to individuals Form 1095-B, Health Coverage, and Form 1095-C, Employer Provided Health Insurance Offer and Coverage, from February 1, 2016 to March 31, 2016 (Section 6055 reports); and
  • for filing with the IRS Form 1094-B, Transmittal of Health Coverage Information Returns, Form 1095-B, Health Coverage, Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage, and Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, from March 31, 2016 to June 30, 2016, if filing electronically, and from February 29, 2016 to May 31, 2016, if not filing electronically (Section 6056 reports).

The extension is being granted to give employers, insurers, and other providers of minimum essential coverage additional time to adapt and implement systems and procedures to gather, analyze and report this information. Notwithstanding the extension, the Notice makes clear that the IRS is prepared to accept filings beginning in January 2016, and employers and other coverage providers are encouraged to furnish statements to individuals and file information returns with the IRS as soon as they are ready.

The extensions are automatic. Employers that do not comply with these extended due dates will be subject to penalties for failure to timely furnish and file, but they are still encouraged to furnish statements to individuals and file returns with the IRS because the IRS "will take such furnishing and filing into consideration when determining whether to abate penalties for reasonable cause."

Finally, the Notice acknowledges that some employees who enrolled in Marketplace coverage but did not receive a determination from the Marketplace that their employer's offer of coverage was not affordable, could be adversely affected by the extension if they do not receive their Forms 1095-C before they file their income tax returns. To mitigate any adverse affects, for 2015 only, employees who rely upon other information received from employers about their offers of coverage for purposes of determining eligibility for the premium tax credit when filing their income tax returns will not need to amend their returns once they receive their Forms 1095-C. Similarly, the IRS recognizes that certain individuals may not have received information about their enrollment in minimum essential coverage before they file their income tax returns. For 2015 only, these individuals may also rely upon other information received from their employers or insurers about their coverage when filing their tax returns, and they will not need to amend their returns once they receive Form 1095-B or Form 1095-C.

Cadillac Tax Delayed

Under the PATH Act, the Cadillac Tax provisions in section 4980I of the Internal Revenue Code, originally scheduled to be effective on January 1, 2018, will be delayed until January 1, 2020. The Cadillac Tax imposes a 40% excise tax on employer-sponsored health care coverage that exceeds certain cost thresholds. These thresholds will continue to be adjusted for inflation during this two-year period. In addition to the delay, the legislation allows employers paying the tax to treat it as a deductible expense, which, when coupled with the delay, is expected to cost the government an estimated $20 billion in tax revenue over a 10-year period. 

The accord also suspends the tax on medical devices for 2016 and 2017 and imposes a moratorium on taxes health insurers are required to pay under the ACA. While both of these additional changes are expected to reduce tax revenues collected, insurers are signaling that the moratorium on the insurer tax could have a positive effect on premiums.

It is still too early to tell whether an agreement to delay the Cadillac Tax is just a first step toward repeal. Regardless, the expectation is that employers and insurers will continue to take steps to reduce health plan costs.

Notice 2015-87

In Notice 2015-87, the Departments issued a series of Q&As on a number of ACA topics, including the following:

  • Applying the ACA market reforms to health reimbursement arrangements (HRAs) and employer payment plans under which an employer seeks to reimburse an employee for premium expenses incurred for individual market health insurance coverage or uses its funds to directly the pay the premium for an individual health insurance policy.
  • Determining employee contributions when employers offer HRAs, flex credits, and opt-out payments to employees who decline coverage under an employer-sponsored plan.
  • Announcing that the 9.5% affordability standard is adjusted annually and is set at 9.56% for 2015 and 9.66% for 2016 and clarifying that the adjustment applies to all provisions of the ACA that use the 9.5% standard.
  • Updating for inflation the assessments under Code sections 4980H(a) and 4980H(b). The annual per full-time employee penalty under section 4980H(a) increases from $2,000 to $2,080 for 2015 and to $2,160 for 2016. The annual per employee assessment under section 4980H(b) increases from $3,000 to $3,120 for 2015 and to $3,240 for 2016.
  • Clarifying what constitutes an "hour of service" when no duties are performed, e.g., when an employee is receiving worker's compensation benefits or long-term disability benefits.
  • Applying employment break period rules for employees who perform services for an educational organization but who are not the employee of the educational organization because, for example, they are an employee of a staffing agency.
  • Applying COBRA rules to unused amounts in health FSAs that are carried over to later years.
  • Announcing relief from penalties for employers that make a good faith effort to comply with the ACA information reporting requirements under Code section 6056 (the employer shared responsibility provisions). Specifically, relief is provided for returns and statements filed and furnished in 2016 to report offers of coverage in 2015 for incorrect or incomplete information reported on the return or statement. This relief does not apply in the case of applicable large employer members that cannot show a good faith effort to comply with the information reporting requirements or that fail to timely file an information return or furnish a statement. However, consistent with existing information reporting rules, applicable large employer members that fail to timely meet the requirements still may be eligible for penalty relief if the IRS determines that the standards for reasonable cause are satisfied. This relief is similar to the relief that has been provided with respect to reporting on coverage under Code section 6055 (enrollment in minimum essential coverage).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Foley & Lardner
Grant Thornton LLP
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Foley & Lardner
Grant Thornton LLP
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions