A new requirement for the 2015 tax year is that health insurance companies now need to issue Form 1095-B to those insured, confirming that they have minimum essential health insurance coverage.  Similarly, large employers providing insurance must issue Form 1095-C to their employees stating the coverage and their share of its cost.  The forms are due to be postmarked by the end of January 2016.

But it turns out that many of these folks weren’t ready for this unexpected deadline.  (Sarcasm: this deadline has been in the plan for years — ever since the ACA passed.)  So the IRS, with Notice 2016-04, issued an extension until March 31st.  Quick summary here.

So why do we care?  We’re not health insurance companies or large employers.  Well, the issue is that on individual returns, tax preparers need to indicate whether the taxpayer had minimum essential coverage or not, as well as calculate whether the taxpayer qualifies for any premium assistance credit.  Without these forms, we won’t necessarily have that information — unless the taxpayer is getting health insurance directly through the Marketplace: their Form 1095-A is still slated to arrive by the end of January, as was originally the deadline for the other forms.

As a result of these extensions, individuals might not receive a Form 1095-B or Form 1095-C by the time they file their 2015 tax returns. The IRS is allowing us to depend on other information from insurance providers and employers that would give us the same answer, so as not to file extensions for all these taxpayers.  But this could be hard to come by… if these companies weren’t ready to send out these forms, they may not have anything else that has similar information on which we can rely.  Expect this to be a tax season challenge.

Questions?  The IRS has a great chart on how these forms matter to taxpayers on their returns, what they should expect to receive, and what they should do when they receive it: https://www.irs.gov/Affordable-Care-Act/Individuals-and-Families/Health-Care-Law-and-Your-Tax-Return

As a side note, the IRS isn’t requiring these companies to file the IRS copies of the same forms until June 30th, so I think it’s safe to bet we won’t see a matching program in place this season, and with the IRS so woefully understaffed, audits of coverage and credits will be far down the line, if they happen at all for this filing year.