ADP Research Institute®

IRS Releases Updated ACA Tax Provisions Questions and Answers



On December 22, 2016, the Internal Revenue Service (IRS) updated the Affordable Care Act (ACA) Tax Provisions web page with both new and revised Questions and Answers. The information published specifically expands upon the topics of the Employer Shared Responsibility Provision, Information Reporting by Employers on Forms 1094-C and 1095-C and Reporting on Offers of Health Insurance Coverage by Employers.

The IRS frequently asked questions incorporate information included in the 2016 Instructions for Forms 1094-C and 1095-C and are to be used in conjunction with the instructions when completing Forms 1094-C and 1095-C for the 2016 tax year. IRS Notice 2016–70 is referenced which extended the due date for furnishing Forms 1095-C and the good faith transition relief for tax year 2016. Also, see ADP’s Eye on Washington titled New IRS Guidance Extends ACA Information Reporting Due Dates for more information.

The Questions and Answers on Reporting Offers of COBRA Continuation Coverage that were removed last February were also revised and included again as part of this update. The IRS clarifies how reporting should be completed for offers of COBRA made to terminated employees and active employees that are no longer eligible for benefits under the employer’s plan. Several scenario-based examples are included.

For Applicable Large Employers with non-calendar year plans (plans with a start date other than January 1), certain relief may be available for months in 2016 that are part of the 2015 plan year. See the frequently asked questions on Limited Transition Relief in 2016 for further details.

In Question and Answer 56 and 57 under the Making An Employer Shared Responsibility Payment section, the IRS reiterates that letters regarding potential liability for employer shared responsibility payments will be mailed to employers in early 2017. In addition, the IRS states they expect to issue additional guidance describing the payment procedures before any letters are mailed. Recently the IRS started sending letters to organizations that may be Applicable Large Employers, but did not file 2015 Forms 1094-C and 1095-C. The IRS requires letter recipients to respond to non-filing letters within 30 days of the date of the letter.

To view these Questions and Answers mentioned above and others, visit the IRS’ Affordable Care Act (ACA) Tax Provisions web page.

ADP Compliance Resources

ADP maintains a staff of dedicated professionals who carefully monitor federal and state legislative and regulatory measures affecting employment-related human resource, payroll, tax and benefits administration, and help ensure that ADP systems are updated as relevant laws evolve. For the latest on how federal and state tax law changes may impact your business, visit the ADP Eye on Washington Web page located at www.adp.com/regulatorynews.

ADP is committed to assisting businesses with increased compliance requirements resulting from rapidly evolving legislation. Our goal is to help minimize your administrative burden across the entire spectrum of employment-related payroll, tax, HR and benefits, so that you can focus on running your business. This information is provided as a courtesy to assist in your understanding of the impact of certain regulatory requirements and should not be construed as tax or legal advice. Such information is by nature subject to revision and may not be the most current information available. ADP encourages readers to consult with appropriate legal and/or tax advisors. Please be advised that calls to and from ADP may be monitored or recorded.

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Last updated January 11, 2017

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