Ahh…2021! Perhaps never in recent history has the collective populace been as excited to turn the page to a new year. But as we all know, the first quarter of each new calendar year brings numerous welfare benefit plan reporting and disclosure obligations, chief among them being Affordable Care Act employer mandate reporting, accompanied this year by a new slate of state-required individual mandate reporting obligations.
You’ll notice a slightly different look to our deadlines and reminders grid this quarter. We’ve first separated items into three categories: federal deadlines, state and local deadlines, and pandemic-related reminders. Within each section we’ve then followed our typical chronological approach. As a reminder, these deadlines may or may not be applicable to your group depending on the employer and plan characteristics.
Here are potential action items for the first calendar quarter of 2021. Please note that where a deadline falls on a weekend (like the Jan. 31 due dates) or holiday, typically the report or disclosure is considered timely if provided by the next business day. For example, the IRS will consider Forms W-2 timely filed if submitted by Feb. 1, 2021.
FEDERAL DEADLINES
Jan. 1 (For calendar year plans; non-calendar year plans must distribute by the first day of the plan year)
Distribute notice of grandfathered status
Applies to ERISA and non-ERISA grandfathered plans subject to health reform.
Presumably must be given to all participants no later than the first day of each plan year with respect to which the plan maintains grandfathered status. This is most often included in open enrollment or other plan materials supplied to participants.
Lockton has model notice language available upon request.
Jan. 31
Reflect imputed taxable income on Forms W-2
Imputed income might be an issue where health coverage is provided to non-dependent domestic partners and/or their children, or to an employee’s non-dependent adult, biological, step, adopted or foster child beyond the year the child attains age 26, or to other individuals with respect to whom coverage supplied to them is taxable to the employee, for federal tax purposes.
Health coverage supplied to a same-sex spouse is nontaxable (for federal tax purposes) to the employee.
Imputed income may also arise under group-term life insurance and some long-term disability programs.
Depending on state law, state income taxation may vary from federal taxation.
Jan. 31
Report HSA contributions on Forms W-2
Employers report health savings account (HSA) contributions on employees’ Forms W-2 in Box 12, using code W. IRS instructions say to report “employer contributions” to HSAs, but because the IRS views employee pretax payroll deductions as employer dollars, employers should also report employee pretax contributions to their HSAs if the contributions are made through payroll.
Jan. 31
Report health plan coverage values on Forms W-2
W-2 reporting of health plan coverage values is merely informational and applies to employer sponsors of both grandfathered and non-grandfathered plans. This obligation applies with respect to reportable coverage, whether taxable or nontaxable.
Stand-alone dental and vision coverage, HRA contributions, and health FSAs funded solely by employee pretax contributions are exempt from this reporting requirement. Other exclusions also apply depending on the specific facts and circumstances.
An employer (EIN-by-EIN basis) can be excused from reporting, if it was required to file fewer than 250 Forms W-2 in the prior calendar year.
Feb. 28 (If filing paper forms; see entry below for March 31 if e-filing)
Submit Forms 1095-C and/or 1095-B to IRS with Forms 1094-C or 1094-B
Employers must transmit copies of these forms to the IRS, with one or more Forms 1094-C or 1094-B transmittal documents.
If the employer is submitting at least 250 of the same forms (1095-C or -B) to the IRS, it must e-file the forms along with the 1094-C or -B unless it obtains a waiver from the e-filing requirement.
For more information on e-filing, see the March 31 deadline for e-filing below.
An automatic 30-day extension of time is available by filing Form 8809 on or before Feb. 28, 2021.
March 1 (For calendar year plans; non-calendar year plans must submit within 60 days following the first day of the plan year)
Submit annual notice of creditable and/or non-creditable coverage to CMS
ERISA and non-ERISA plans must certify to CMS that prescription drug coverage offered under the plan is either Medicare Part D creditable or non-creditable.
The filing is made online.
March 1
File Form M-1 on behalf of multiple-employer welfare arrangements (MEWAs) and certain other arrangements
Applies to some MEWAs as defined in ERISA, and some collectively bargained, multiple-employer programs.
An annual report (M-1) is not required if between Oct. 1 and Dec. 1 of the prior year, the MEWA experienced an origination or special filing event and timely filed the M-1.
Some exceptions to Form M-1 filing apply. See Form M-1 and its instructions for more details.
March 2 (Extended by IRS, from Jan. 31)
Report coverage offers to ACA full-time employees on Forms 1095-C, and/or self-insured coverage to primary insureds on Forms 1095-C or 1095-B
Applies to employers subject to the ACA employer mandate, and to smaller employers providing self-insured medical coverage to employees in the prior calendar year.
The employer must provide a Form 1095-C with Parts I and II completed to each employee considered full-time (for ACA employer mandate purposes) for at least a month in 2020.
Self-insured employers must provide this Form, with Parts I and III completed, to each individual who had self-insured coverage for at least a day in 2020 (some employers will use Form 1095-B; minor exceptions apply to this requirement with respect to non-full-time employees).
March 31 (If e-filing: see entry above for Feb. 28, if filing paper forms)
E-file Forms 1095-C and/or 1095-B with IRS, with Form 1094-C and 1094-B
Applies to employers providing to employees (or providing or making available to primary insureds) Forms 1095-C or 1095-B.
Employers providing to employees (or providing or making available to primary insureds) Forms 1095-C or 1095-B must transmit copies of these forms to the IRS, with one or more Forms 1094-C or 1094-B transmittal documents. If the employer is submitting at least 250 of the same forms (1095-C or -B) to the IRS, it must e-file the forms unless the employer obtains a waiver from the e-filing requirement.
The employer may apply for a waiver of the e-filing requirement (if it prefers to file paper forms) on IRS Form 8508. However, if the waiver is granted, the employer must submit its paper forms by Feb. 28, subject to a potential 30-day extension of time via Form 8809.
E-filing is accomplished through the IRS’s AIR platform (opens a new window).
An automatic 30-day extension of time is available by filing Form 8809 on or before March 31, 2021.
STATE AND LOCAL DEADLINES
Jan. 30
Make San Francisco HCSO contributions for prior calendar quarter
For employers subject to the San Francisco Healthcare Security Ordinance.
Quarterly contributions, if due for the quarter ending Dec. 31, are due by Jan. 30. Self-funded employers have the option of utilizing an annual true-up method in lieu of quarterly filings. The true-up method filing deadline is on Feb. 28 (see below).
Jan. 31
Distribute Massachusetts Form 1099-HC
Applies to employers that in 2020 had employees in Massachusetts who had creditable coverage (as defined under Massachusetts law) under the employer’s plan during the preceding calendar year, and to the Massachusetts Department of Revenue. The disclosure is made to the employees.
The employer has the obligation under state law to furnish the Form, but if the plan is insured and the contract was issued or delivered in Massachusetts, the carrier has the obligation.
The obligation on ERISA employers may be unenforceable due to ERISA preemption, but failure to provide an employee with a Form 1099-HC could trigger additional state taxes on the employee.
Jan. 31
Distribute Forms 1095-C to individuals who in the prior year were California residents and covered under the employer’s self-insured medical plan
Applies to employers who provided self-insured medical coverage to California residents in 2020.
Due to California’s individual mandate requiring residents to have minimum essential coverage (effective Jan. 1, 2020), employers that provided self-insured coverage to California residents during 2020 must furnish a federal Form 1095-C to the primary insured showing the period of coverage in 2020 for the primary insured and dependents.
Employers that furnish the Form 1095-C to satisfy IRS requirements are not required to again furnish the form to satisfy California requirements. However, state and IRS due dates may be different; for example, the IRS’s 2021 deadline for this furnishing requirement is March 2. California might extend its deadline to comport with the IRS deadline, but that has not been communicated at the time of this publication.
Feb. 28
Make San Francisco Healthcare Security Ordinance expenditures due for prior year for covered employees in self-insured health plan
Applies to employers subject to the San Francisco Health Care Security Ordinance (HCSO).
Employers providing health insurance to San Francisco HCSO-covered employees under a self-insured plan and utilizing the annual method for determining adequacy of healthcare expenditures under that plan have until the last day of February to make any required true-up contributions for the prior year.
March 2
Distribute coverage statements to individuals who in the prior year were New Jersey residents and covered under the employer’s self-insured medical plan
Applies to employers who provided self-insured medical coverage to New Jersey residents in 2020.
Due to New Jersey’s individual mandate requiring residents to have minimum essential coverage (effective Jan. 1, 2019), employers that provided self-insured coverage to a New Jersey resident during 2020 must furnish to the primary insured a statement showing the period of coverage for the primary insured and dependents. A copy of IRS Form 1095-C satisfies the disclosure requirement, or the employer may instead utilize Form NJ-1095.
Employers that furnish the Form 1095-C to satisfy IRS requirements are not required to again furnish the form to satisfy New Jersey requirements. However, state and IRS due dates may be different.
March 2
Distribute coverage statements to individuals who in the prior year were Rhode Island residents and covered under the employer’s medical plan
Applies to employers who provided self-insured medical coverage to Rhode Island residents in 2020.
Due to Rhode Island’s individual mandate requiring residents to have minimum essential coverage (eff. Jan. 1, 2020), employers that provided self-insured coverage to a Rhode Island resident during 2020 must furnish to the primary insured a statement showing the period of coverage for the primary insured and dependents. A copy of IRS Form 1095-C satisfies the disclosure requirement.
Employers that furnish the Form 1095-C to satisfy IRS requirements are not required to again furnish the form to satisfy Rhode Island requirements. However, state and IRS due dates may be different.
Employers that provide insured coverage to a Rhode Island resident during the prior year are not required to provide the required coverage information to the resident, as long as the insurer provides it.
March 31
Submit Forms 1095-C and/or 1095-B, with Form 1094-C or 1094-B, to the California Franchise Tax Board
Applies to employers who provided medical coverage to California residents in 2020.
Employers that provided self-insured coverage to California residents during 2020 must file with the Franchise Tax Board copies of the IRS Forms 1095-C with respect to such residents that the employer filed with the IRS for 2020, along with the employer’s Form 1094-C.
Employers that provided insured coverage to California residents during the prior year are not required to file the required coverage information with the Franchise Tax Board, as long as the insurer files it.
Filing must be made electronically if the employer is submitting at least 250 of the same forms.
March 31
Submit coverage statements to the New Jersey Division of Revenue and Enterprise Services
Applies to employers who provided medical coverage to New Jersey residents in 2020.
Employers that provided self-insured coverage to New Jersey residents during 2020 must file with the Division of Revenue and Enterprise Services copies of the IRS Forms 1095-C with respect to such residents that the employer filed with the IRS for 2020, along with the employer’s Form 1094-C. Although New Jersey will accept the same sort of coverage information on Forms NJ-1095, employers will typically want to simply submit copies of the forms they filed with the IRS.
Employers that provided insured coverage to New Jersey residents during the prior year are not required to file the required coverage information with the Division of Revenue and Enterprise Services as long as the insurer files it.
March 31
Submit coverage statements to the Rhode Island Department of Revenue, Division of Taxation
Applies to employers who provided medical coverage to Rhode Island residents in 2020.
Employers that provided self-insured coverage to Rhode Island residents during 2020 must file with the Department of Revenue, Division of Taxation, copies of the IRS Forms 1095-C with respect to such residents that the employer filed with the IRS for 2020, along with the employer’s Form 1094-C. Although Rhode Island will accept the same sort of coverage information on an equivalent statement, employers will typically want to simply submit copies of the forms they filed with the IRS.
Employers that provided insured coverage to Rhode Island residents during the prior year are not required to file the required coverage information with the Department of Revenue, Division of Taxation as long as the insurer files it.
PANDEMIC-RELATED REMINDERS
Various
Provide ERISA-related notices and disclosures
Federal authorities, as part of their pandemic-related guidance, have granted plan administrators leeway, where that leeway is necessary, to provide ERISA-related notices and disclosures (e.g., COBRA election packets) to plan participants and beneficiaries later than would otherwise be required, as long as the administrator provides the notices and disclosures as soon as practicable. Administrators are also granted wider latitude to provide these notices and disclosures via email or a continuously available website. See our alert (opens a new window) for more information.
Various
Adjust various COBRA election and premium payment, HIPAA special enrollment election, and plan claim submission and appeal due dates
While not literally a reporting and disclosure issue, federal guidance requires plan administrators to suspend the running of various deadlines affecting plan participants and beneficiaries for the period from March 1, 2020, to the date that is 60 days after the president rescinds the national emergency declaration related to the coronavirus pandemic. That rescission has not yet occurred as of the date of this publication, so this “outbreak period” is still a moving target.
Affected deadlines include those for initial COBRA elections, COBRA premium payments, HIPAA special enrollment applications, and deadlines related to claim and appeal submissions. See our alert (opens a new window) for more information.
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