Post on 23-Jun-2020
Presented by
Elizabeth Vollmar, J.D. Mark Holloway, J.D. Compliance Services, Lockton Benefit Group
JoAnne Pettijohn HR Technology & Outsourcing Practice, Lockton Benefit Group
ACA Reporting Forms
Final IRS Instructions for Employer Reporting on Forms 1094-C and 1095-C
© 2015 Lockton Benefit Group Images © 2015 Thinkstock. All rights reserved.
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5
ACA Reporting Forms
Final IRS Instructions for Employer Reporting on Forms 1094-C and 1095-C
Presented by
Elizabeth Vollmar, J.D. Mark Holloway, J.D. Compliance Services, Lockton Benefit Group
JoAnne Pettijohn HR Technology & Outsourcing Practice, Lockton Benefit Group
© 2015 Lockton Benefit Group Images © 2015 Thinkstock. All rights reserved.
To View Webcast Click Here
Introduction, Acknowledgements, and Agenda
Introduction and Acknowledgments
Welcome to our Compliance Services webcast
Introductions and topic summary
Handouts and last minute changes
Questions and answers
Replay link
Acknowledgements
8
Agenda
Reasons for the employer reporting requirements
Employer reporting obligations—who, what, when, and how?
What information needs to be reported, exactly?
A closer look at Form 1095-C
A closer look at Form 1094-C
Delivery of Forms 1094-C and 1095-C
How the right technology can help
Questions
9
Reasons for the Employer Reporting Requirements
Reason #1 for Employer Reporting
The individual mandate
Individuals must have “minimum essential coverage” (MEC) or pay modest penalty for noncompliance
MEC includes almost any employer medical plan, if it’s not excepted benefits
Tax/penalty for “no coverage” throughout calendar year = greater of percentage amount or dollar amount
Reduced proportionately for months the individual complied with mandate
How does the IRS know whether an individual has MEC?
Each individual indicates on his or her tax return
Information reporting by employers and others
Percentage Amount Dollar Amount
Tax Year % of Income Per Adult Per Child Per Family
2014 1% $95 $47.50 $285
2015 2% (up to $2,484) $325 $162.50 $975
2016 2.5% (up to $TBA) $695 $347.50 $2,085
11
Reason #2 for Employer Reporting
The employer mandate
Employer may be penalized if a full-time employee gets a tax credit to buy coverage on a state insurance exchange
Applies if employer, together with controlled group and affiliated service group members, has 50 or more full-time employees (including full-time equivalent employees)
For 2015, a transition rule may delay compliance for such employer groups with 50-99 full-time employees (including full-time equivalent employees)
50-99 rule does not delay reporting!
If no full-time employee gets a tax credit, employer incurs no penalty
12
Reason #2 for Employer Reporting
The employer mandate
Several conditions must be met for a person to get tax credit, such as:
Family income under 4X federal poverty level
Not covered by MEC
No employer offer of minimum value (MV) and affordable coverage
Even if a full-time employee gets the tax credit:
No employer penalty if all full-time employees were offered:
MV and affordable self-only coverage
MEC for biological and adopted children
Greatly reduced penalty if at least 70% (95% after 2015) of full-time employees were offered MEC, with option to cover children
All Health Coverage
MEC
MV
MV & Affordable
13
Reason #2 for Employer Reporting
The employer mandate
How does the IRS know whether a person has MEC and whether an employer has offered MEC or MV and affordable coverage?
Employer tells them
Completes Forms 1094-C and 1095-C, reporting coverage offered to each full-time employee
Also includes information on individuals who have self-insured coverage that is at least MEC through the employer
Insurer tells them about individuals who have insured coverage that is at least MEC
Exchanges report through HHS data hub each month and IRS gets information that may include employment and employer coverage offers
14
Reason #3 for Employer Reporting
Policing the tax credit
Most individuals may buy coverage through a public health insurance exchange
Doesn’t matter whether/what coverage the person has, or was offered, unless applying for tax credit
Tax credit is NOT available to anyone who is:
Enrolled under employer-based MEC
Offered employer-based minimum value and affordable coverage
Eligible as a dependent under employer-based coverage if employee was offered MV and affordable self-only coverage
How does the IRS know what coverage a person had or was offered?
Same way it knows if employer owes a penalty
Also, individual must complete Form 8962 and file with tax return
15
Overview of Information Reporting to IRS
16
IRS
Exchange
Data Hub
HHS
Form 1094-B Transmittal of Forms 1095-B
Insurer
Form 1094-C Transmittal of Forms 1095-C
Employer
Form 8962
Employee Receiving Tax
Credit
Annual Filing (Form 1095-A?)
Form 1095-C
Form 1095-A
Form 1095-B
Monthly Report
For details on use of information, please replay our Feb. 19 webcast
Employer Reporting Obligations— Who, What, When, and How?
Overview of Information Reporting to IRS
18
IRS
Exchange
Data Hub
HHS
Form 1094-B Transmittal of Forms 1095-B
Insurer
Form 1094-C Transmittal of Forms 1095-C
Form 8962
Employee Receiving Tax
Credit
Annual Filing (Form 1095-A?)
Employer
Form 1095-C
Form 1095-A
Form 1095-B
Monthly Report
Focusing on reporting by employers subject to employer mandate
Employer Reporting Obligations—Who?
Which employers are required to report?
Employers providing self-insured coverage
Must report on anyone who had that coverage for even a single day
Employers subject to the employer mandate
Must report on coverage offers made to full-time employees
Also must report coverage offers to dependents of full-time employees
These offers can disqualify the dependents from receiving the tax credit
As a general rule, it’s the common law employer who has the reporting obligation
Not necessarily the plan sponsor
Plan sponsor can help, but common law employer is on the hook for reporting on its employees
Special rules for governmental employers
19
Common Law Employers Within a Controlled Group
If HoldCo, Inc. sponsors a plan for employees of all four companies:
HoldCo, SubCo 1 and SubCo 2 each must file separately, only on its own employees
Partnership is not subject to the employer mandate and need not file (unless providing self-insured coverage to its employees)
HoldCo, Inc. [EIN 12-3456789]
15 full-time employees
83%
SubCo 2, Inc. [EIN 34-5678912]
25 full-time employees
50%
Partnership [EIN 45-6789123]
10 full-time employees
100%
SubCo 1, Inc. [EIN 23-4567891]
35 full-time employees
20
Employer Reporting Obligations—What?
What reporting is required?
Very similar to W-2 reporting, and W-3 transmittals
Provide annual statement (Form 1095-C) with individualized information to:
Each full-time employee, even if not eligible or covered
Full-time employees are those identified as averaging 30+ hours of service per week using look-back measurement method (assuming employer is using that for play or pay purposes)
We’re referring to these individuals as “FTEs” (not to be confused with full-time equivalents)
Month-by-month summary of MEC and/or MV coverage offered to the FTE and family members
Generally, coverage is not considered offered for a month unless it would be in effect each day of the month if elected
Each “primary insured,” even if not full-time or an employee
Month-by-month summary of self-insured coverage provided to primary insured and each enrolled dependent (including spouse)
Indicate for each enrollee each month in which covered for at least one day
File those annual individual statements with the IRS along with a separate annual statement (Form 1094-C) regarding aggregate coverage offering
21
Employer Reporting Obligations—When?
When are employers required to report?
Reporting is required for each calendar year shortly after year-end
Individualized statements to FTEs and primary insureds for 2015 must be provided by Feb. 1, 2016
Employer-level report and transmittal of individual statements to the IRS is due Feb. 29, 2016 or, if electronic, March 31, 2016
22
Employer Reporting Obligations—How?
How do employers complete the required reporting?
Employers that are subject to employer mandate use Forms 1094-C and 1095-C for all reporting on employees
Such employers may use the “C Forms” to report on self-insured coverage provided to non-employees (e.g., outside directors, COBRA beneficiaries)
Or, they may use Forms 1094-B and 1095-B to report non-employees’ self-insured coverage
Employers not subject to the employer mandate (fewer than 50 FTEs and full-time equivalents) must use the “B Forms” to report self-insured coverage
Insurers use the B Forms to report insured coverage
An employer subject to the employer mandate and providing only insured coverage would report on coverage offered to FTEs on C Forms
Insurer providing coverage would report actual coverage on B Forms
Today, we are covering only how employers subject to the employer mandate would use the C Forms to report
23
Employer Reporting Obligations—How?
The final forms…for 2014
24
What Information Needs to be Reported, Exactly?
What you’ll need to complete Form 1095-C for 2015:
Identifying information for each separate employer within a controlled or affiliated service group
For each employer, name, address and SSN for each person who was its FTE for at least one month during 2015
For each such employee, full calendar months for which he or she was:
Offered MV coverage, and if so whether the offer included:
At least MEC for spouse
At least MEC for biological and adopted children
At least MEC for spouse and biological and adopted children
Offered MEC that was not MV (with or without option to cover spouse or children)
Offered no coverage (or only non-MEC coverage or a partial month)
For each month that an employee was offered MV coverage, the lowest monthly amount employee would pay for self-only MV coverage
Form 1095-C: Data Elements
26
Form 1095-C: Data Elements
What you’ll need to complete Form 1095-C for 2015:
Note for each FTE, for each month, the first situation that fits
Regardless of whether coverage was offered, whether the multiemployer plan rule applies for the employee
Regardless of coverage offered, whether the employee was enrolled in at least MEC on every day of the month
If offered MV for a full month, but not enrolled, which affordability safe harbor, if any, applied to the employee
If offered no coverage (or only partial month or non-MEC coverage), whether the employee was employed by the employer on any day that month
If none of these apply go to next slide
27
Form 1095-C: Data Elements
What you’ll need to complete Form 1095-C for 2015:
Note for each FTE, for each month, the first situation that fits (continued) If employed during the month, but offered no coverage (or only partial month or non-
MEC coverage), whether employee was, for that month:
In a “limited non-assessment period,” (LNAP) including:
Waiting period for a new employee expected on start date to average 30+ hours of service per week, if eligible by first day of 4th full calendar month of employment
For other new employees, initial measurement period and initial administration period, if:
Eligible when administration period ends
And that occurs no later than first day of 14th full calendar month of employment
Not an FTE (including last month of employment if not covered through end of month and January 2015, if using first payroll period transition rule)
Deemed offered coverage due to the non-calendar plan year transition rule
If none apply to an FTE for a month, note that no code will be entered on line 16
28
What you’ll need to complete Form 1095-C for 2015:
If the employer provided self-insured coverage, name, address and SSN for each primary insured who was covered for at least a day
Primary insured generally is the employee or other covered person who can enroll family members
If the primary insured was also an FTE whose coverage offer must be reported, combine information on a single Form 1095-C
Identifying information (including SSN or, if SSN unavailable, date of birth) for each of the individuals the primary insured enrolled
For the primary insured and each enrollee, the months the self-insured coverage was in effect for at least one day
Form 1095-C: Data Elements
29
Form 1094-C: Data Elements
What you’ll need to complete Form 1094-C for 2015:
Identifying information for each employer in a controlled or affiliated service group
Each employer files a separate Form 1094-C, but reports information re: other employer members
Identifying information for the filing employer, including name and phone number of person to contact for information on filing
Total number of Forms 1095-C the employer issued
For each month, whether at least 70% (95% after 2015) of employer’s FTEs were offered at least MEC, including option to cover children
For each month, the employer’s number of FTEs and total number of employees (of any type)
Whether employer is in a controlled or affiliated service group and, if so, each member’s EIN and average monthly number of FTEs
Whether “free 80” transition relief applies or “50-99” transition relief applies
Assuming that employers will not use the reporting “shortcuts”
30
A Closer Look at Form 1095-C
32
Three Parts to Form 1095-C
Part I—Basic employer and employee identifying information
Part II—Coverage offer information for FTEs (this is difficult)
Part III—Self-insured coverage enrollment information
33
First, Let’s Gather Information For a Hypothetical Employer
Completing the Form 1095-C is the easy part
Getting the information to do so is more difficult
Employers within controlled or affiliated service group (forms refer to each as an “applicable large employer member”) report separately
HoldCo, Inc.
[EIN 12-3456789]
15 FTEs
SubCo 1, Inc.
[EIN 23-4567891]
35 FTEs
SubCo 2, Inc.
[EIN 34-5678912]
25 FTEs
We’ll look at how HoldCo would complete Form 1095-C for some of its employees
34
HoldCo, Inc. [EIN 12-3456789]
15 full-time employees
83%
SubCo 2, Inc. [EIN 34-5678912]
25 full-time employees
50%
Partnership [EIN 45-6789123]
10 full-time employees
100%
SubCo 1, Inc. [EIN 23-4567891]
35 full-time employees
Gathering Information for HoldCo—Coverage Offered
HoldCo offers two plans—first plan
Fully insured MV coverage for its 40+ hours per week FTEs
MV coverage includes the option to cover both spouse and children
On line 14, HoldCo will enter code 1E for each full calendar month that this coverage was offered to an FTE and, if elected, would be in effect on every day of the month
Monthly employee cost for self-only MV coverage = $100.00 (line 15)
HoldCo enters this amount on line 15 each month that code 1E is entered on line 14
For the MV coverage, HoldCo uses two affordability safe harbors
Form W-2 safe harbor for its salaried FTEs
Rate of pay safe harbor for its hourly FTEs
35
Gathering Information for HoldCo—Coverage Offered
HoldCo offers two plans—second plan
Self-insured MEC plan that is not MV for its <40 hours per week FTEs and many non-FTEs
Includes option to cover children, but not spouse
HoldCo will enter code 1F on line 14 for each full calendar month that this coverage is offered to an FTE and, if elected, would be in effect on every day of the month
No amount is reported on line 15 for months of MEC plan offering
If HoldCo has employees that are offered both the MV plan and the MEC plan for a month, it will report the MV offer
36
All Health Coverage
MEC
MV
MV & Affordable
Gathering Information for HoldCo—Reporting Obligations
HoldCo made some decisions about reporting
HoldCo knows that it needs to prepare one Form 1095-C for each individual who was one of the following during 2015:
A primary insured who was covered under HoldCo’s self-insured MEC plan at least one day during the year
An employee who was an FTE of HoldCo for at least a month during the year
Both a primary insured and an FTE
If an FTE of HoldCo also had coverage under its self-insured MEC plan, information must be reported on a single 1095-C
It’s not going to attempt to use any of the reporting “shortcuts”
It’s using the C Forms for all reporting (including self-insured coverage provided to non-employees)
37
Gathering Information for HoldCo—FTEs
HoldCo knows who its 2015 FTEs are for play or pay purposes
It identified its FTEs using the look-back measurement method
12-month standard measurement period (SMP) Nov. 1 through Oct. 31
Calendar year standard stability period (SSP)
HoldCo identifies 15 of its common law employees who were FTEs for at least one calendar month in 2015
It creates a list of those employees with names, addresses, SSNs
For each one, HoldCo lists, by month, whether the employee was offered, for the full month, the MV plan (1E) or the MEC plan (1F) (otherwise it will use code 1H)
HoldCo also notes for each month whether employee enrolled in coverage that was at least MEC and if it was a partial month of enrollment
For full months of enrollment, it will enter code 2C on line 16
38
Gathering Information for HoldCo—Primary Insureds
HoldCo’s MEC plan is self-insured
HoldCo must provide a Form 1095-C for each primary insured
Anyone who had self-insured coverage in effect through HoldCo for at least one day during 2015 and could enroll dependents
For HoldCo, this means those with coverage under its self-insured MEC plan
HoldCo has identified 10 people who are primary insureds (e.g., an employee) covered under its MEC plan for at least one day in 2015
HoldCo creates a list of those primary insureds with names, addresses, SSNs
Two primary insureds are FTEs for whom Form 1095-C is already required
For them, both the coverage offer information (Part II) and the self-insured coverage information (Part III) must be combined on one Form 1095-C
For each primary insured, HoldCo lists the name and SSN (or date of birth if SSN unavailable) of anyone that the primary insured enrolled in MEC
For the primary insured and each enrolled dependent, the calendar months in which the individual had one or more days of coverage under the self-insured MEC plan
39
We Can Complete HoldCo’s First Form 1095-C
Ann Adams was an FTE, enrolled in HoldCo’s MV plan all year
How does HoldCo know that Ann was an FTE throughout 2015?
It used the look-back measurement method and measured her hours during the SMP that ended Oct. 31, 2014
Ann was employed throughout that SMP and HoldCo determined that Ann averaged 30+ hours of service per week during the SMP
Because HoldCo uses the calendar year as its SSP, it knows that, unless Ann terminates employment, she will be an FTE throughout 2015
Where does HoldCo state on Form 1095-C the months that Ann was an FTE?
It’s not stated anywhere on the Form 1095-C
The fact that HoldCo is completing a Form 1095-C for Ann indicates that she was an FTE for at least one month in 2015
If there were months that Ann had no offer of coverage, HoldCo might indicate that Ann was not an FTE for those months
40
We Can Complete HoldCo’s First 1095-C
41
Ann’s coverage is fully insured, so HoldCo does not complete Part III
Code 2C means Ann enrolled in the coverage offered
Code 1E means Ann was offered MV coverage for herself and at least MEC for her spouse and children
Ann was offered the same MV coverage at the same cost, and enrolled in it, for all 12 months of 2015, so HoldCo need not enter Part II information for each month
What About Bob?
Bob Bates was hired into a full-time job Feb. 10, 2015
Because HoldCo expected, on Bob’s start date, that he would average 30+ hours of service per week, Bob is an FTE from that date
Bob is in the group eligible for HoldCo’s MV plan, which has a 90-day waiting period
Bob enrolls and his fully insured coverage under HoldCo’s MV plan becomes effective May 10, 2015
42
What About Bob?
43
Bob has no self-insured coverage from HoldCo during 2015, so HoldCo does not complete Part III
Code 1E means Bob was offered MV coverage for himself and at least MEC for his spouse and children
Code 1H means Bob was offered no coverage or coverage that was not MEC; it’s used through May because coverage was not offered for all days of the month
What About Bob?
44
Code 2A means Bob was not employed by HoldCo on any day during January 2015 (Bob’s start date was Feb. 10, 2015)
Code 2C means Bob was enrolled in the coverage offered for each day of the month—this code does not apply to coverage during May (only a partial month of coverage)
Code 2D means Bob was in an LNAP: first month of employment (Feb.) and waiting period ending May 10, 2015
Carla Quits in March
Carla Cass was an FTE until she quit on Mar. 17, 2015
How does HoldCo know that Carla was an FTE?
It used the look-back measurement method and measured her hours during the SMP that ended Oct. 31, 2014
Carla was employed throughout that SMP and HoldCo determined that she averaged 30+ hours of service per week during the SMP
Because HoldCo uses the calendar year as its SSP, it offered Carla coverage that would have been effective for all of 2015 if she remained employed
Carla declined the coverage, so she had no coverage under any HoldCo plan during 2015
HoldCo’s plan provides for coverage to end on date employment ends
Coverage generally is considered offered for a month only if it would be effective on every day of the month
A special rule protects against employer penalties based on a plan provision that ends coverage mid-month upon termination
Note how this differs from month in which a child reaches age 26
45
Carla Quits in March
46
Carla has no coverage from HoldCo during 2015, so HoldCo does not complete Part III
Code 1E means Carla was offered MV coverage for herself and at least MEC for her spouse and children
Code 1H means Carla was offered no coverage or coverage that was not MEC; it is used for March because her coverage would have ended upon termination of employment if she had enrolled
Carla Quits in March
47
Code 2H means that HoldCo used the rate of pay affordability safe harbor for Carla’s coverage—she was an hourly employee who was offered MV coverage for each day of the month, but didn’t enroll
Code 2B is used for March because Carla quit mid-month and her coverage would have ended on that date if she had been enrolled
Code 2A means Carla was not employed by HoldCo on any day during the month
What Did Dan Doe Do?
Dan Doe was an FTE for all of 2015, and eligible for the MEC plan
How does HoldCo know that Dan was an FTE?
It used the look-back measurement method and measured his hours during the SMP that ended Oct. 31, 2014
Dan was employed throughout that SMP and HoldCo determined that he averaged 30+ hours of service per week during the SMP
Dan was an FTE, but wasn’t a 40 hours per week FTE, so he was offered MEC plan
Because HoldCo uses the calendar year as its SSP, it offered Dan coverage under its MEC plan that would have been effective for all of 2015
Dan initially declined the coverage, but lost another employer’s coverage in June 2015 and completed special enrollment for MEC effective June 15, 2015
48
What Did Dan Doe Do?
49
Code 1F means Dan was offered MEC for each day during the month
Because the coverage isn’t MV, no dollar amount is entered (doesn’t matter whether it’s affordable)
Blank because none of the codes applies—Dan was an FTE, waived coverage, wasn’t in an LNAP, no transition rule applies, and safe harbors are irrelevant
Code 2C indicates Dan enrolled in the MEC for all days of the month beginning July 1 (June was a partial month of coverage)
What Did Dan Doe Do?
50
Because Dan enrolled in the self-insured MEC plan, HoldCo must complete Part III for Dan, showing MEC in effect June - Dec
If Dan had also enrolled a spouse or child, identifying information for that enrollee would be needed
First step to complete Part III is to check the box
June is a month of coverage for Part III because Dan’s coverage was effective for at least one day
June is not a month of coverage for Part II because coverage was not effective on all days of the month
Edith Evans Enrolls In HoldCo’s Self-Insured MEC Plan
Edith was a non-FTE for all of 2015, and eligible for the MEC plan
How does HoldCo know that Edith was a non-FTE?
Same way it knew that Ann, Carla and Dan were FTEs—employed throughout the SMP ending Oct. 31, 2014 and HoldCo measured her hours
Because HoldCo uses the calendar year as its SSP, Edith is a non-FTE for all of 2015
HoldCo has no obligation to report its offer of coverage under its MEC plan to Edith because she was not an FTE for any month of 2015
If Edith doesn’t enroll in HoldCo’s self-insured MEC plan and has no coverage under it on any day during 2015, HoldCo would not issue a Form 1095-C for her
If she does enroll in the self-insured MEC plan, HoldCo must prepare, provide and file a Form 1095-C for Edith
Edith, of course, enrolls
51
Edith Evans Enrolls In HoldCo’s Self-Insured MEC Plan
52
If Edith had also enrolled a spouse or child, identifying information for that enrollee would be needed
Because Edith’s coverage is self-insured, HoldCo must report it by completing Part III, even though Edith was not an FTE for any month in 2015
Because Edith was enrolled throughout 2015, HoldCo checks the “all 12 months” box
Code 1G means Edith was offered coverage even though she was not an FTE for any month of 2015—if the coverage had been insured, HoldCo would not prepare a Form 1095-C for Edith
First step to complete Part III is to check the box
A Closer Look at Form 1094-C
A Closer Look at Form 1094-C
Four parts to the Form 1094-C
Part I—Basic identifying information for the employer
And, in the case of a governmental employer that designates another governmental entity as the filing entity, identifying information for that entity
Part II—If the 1094-C is the “Authoritative Transmittal” for the employer (there’s only one of these), it must complete the remaining Part II items:
Total Forms 1095-C submitted by the employer
Whether it is a member of a controlled or affiliated service group of companies
Whether using reporting “shortcuts” or one of two transition rules (more on transition rules in Part III)
Part III—Information demonstrating the employer’s compliance (or lack thereof) with the employer mandate, on an aggregate basis
This is the difficult part of Form 1094-C—we’ll come back to it
Part IV—Corporate family tree information (more on this in a moment)
54
Now HoldCo is Going to Complete Its Form 1094-C
Same EIN-by-EIN reporting applies to Form 1094-C
Employers within controlled or affiliated service group (forms refer to each as an “applicable large employer member”) report separately
HoldCo, Inc.
[EIN 12-3456789]
15 FTEs
SubCo 1, Inc.
[EIN 23-4567891]
35 FTEs
SubCo 2, Inc.
[EIN 34-5678912]
25 FTEs
We’ll look at how HoldCo would complete Form 1094-C
55
HoldCo, Inc. [EIN 12-3456789]
15 full-time employees
83%
SubCo 2, Inc. [EIN 34-5678912]
25 full-time employees
50%
Partnership [EIN 45-6789123]
10 full-time employees
100%
SubCo 1, Inc. [EIN 23-4567891]
35 full-time employees
56
Employer information, especially EIN, needs to match that on Forms 1095-C transmitted
If “Yes,” complete Part IV
HoldCo is filing only one Form 1094-C, so it’s the authoritative transmittal and lines 18 and 20 match
If “No,” do not check the box and do not continue
Skipping Over Part III for the Moment, Looking at Part IV
Four parts to the Form 1094-C
Part IV—Corporate family tree information (other members of the employer’s controlled group or affiliated service group)
Rank the other members of the controlled or affiliated service group by average monthly number of FTEs reported
Start with the group member with the highest average monthly number of FTEs, listing up to a total of 30 other group members, in descending order
HoldCo has two controlled group members to list: SubCo 1 and SubCo 2
Assuming that SubCo 1 has a higher average monthly FTE count than SubCo 2
Partnership is not listed because it is not in the same controlled group or affiliated service group as HoldCo
57
Now We Get to Part III – Here’s How HoldCo Completed It
58
Column (a) of Part III—Percentage of FTEs Offered MEC
Was at least MEC (including option to cover children) offered to ≥95% of FTEs
Determined separately for each month on an EIN-by-EIN basis
Here are some “giveaways” from the IRS…
Check “Yes” for any month in 2015 that ≥70% of FTEs were offered at least MEC (HoldCo met this all 12 months)
Check “Yes” if fall short of 70% because coverage had no option to cover children, but working on it
If an FTE is deemed to have a coverage offer under transition and other rules, it counts for purposes of this test
Includes:
Non-calendar plan year transition rule applies and FTE was offered coverage at start of 2015 plan year
Multiemployer plan relief applies
Last month of employment
Disregard those in an LNAP
59
Column (b) of Part III—Monthly Count of FTEs
FTE count by month
Employer will know the number due to play or pay rules—FTEs determined the same way for this report
Clarification:
Don’t count employees in an LNAP, including:
Initial measurement and administration period for variable hour employees
First three full calendar months of employment for new FTEs
NOTE: Employer MUST offer coverage by day after LNAP ends to take advantage of this rule
60
Column (c) of Part III—Monthly Count of All Employees
Total employee count for employer, including FTEs and non-FTEs, by month
Includes employees in an LNAP
Use one of four dates each month to count, but must use the same one for all 12 months
First day of the month
Last day of the month
First day of first payroll period starting during the month
Last day of first payroll period starting during the month, but only if that day is in the same month that payroll period started
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Columns (d) and (e) of Part III
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HoldCo checks the first box in column (d) because it is a controlled group member throughout 2015
HoldCo enters code “B” in the first box in column (e) to indicate that it qualifies for the “free 80” transition rule—an employer claiming the “50-99” transition relief would put code “A” in column (e)
Delivery of Forms 1095-C and 1094-C
Delivery of Reporting Forms
Distributing Form 1095-C
To the employee or primary insured
By Feb. 1, 2016
May be delivered by any means acceptable for a W-2
Clearly acceptable: By mail, or electronically with recipient’s affirmative consent
To the IRS, with Form 1094-C
By Feb. 29, 2016, if filing on paper
By March 31, 2016 if filing electronically
An employer filing 250 or more Forms 1095-C must submit them to the IRS electronically
Determined on an EIN-by-EIN basis
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How the Right Technology Can Help
How can my current HRIS Vendor help me with ACA compliance related to:
Aggregating data from my disparate HRIS systems (HR, Payroll, Benefit Administration and Leave Administration)?
Ensuring I am capturing required data?
Determination of eligibility? Monitor affordability?
Eligibility Alerts? Initial Notice of Exchange?
Populating the required IRS forms? Distributing IRS Forms?
Exchange/Subsidy Notification log and/or responses?
Storing aggregated data for 7 years? Audit reconciliation?
Analytics and Review • Data Aggregation
[Payroll/HR/Report Writing/ ACA Tool]
• Strategic options; Impacts and opportunities; Plan Affordability
[Employer/ACA Tool/ Service Vendor]
Workforce Management • Ensure compliance policy of
corporation and/or individual employee level/ Monitor against ACA required eligibility (130 hours a month) [Employer/ACA Tool]
Reporting & Communications • 1094-C & 1095-C & Notice of
Exchanges & Federal reporting and submissions [Employer/ACA Tool]
Auditing • Audit History
[Payroll/HR/Report Writing/ ACA Tool]
• Penalty assessment/reconciliation [Employer/ Service Vendor]
Compliance • Regulatory Management;
Notice of Coverage; Federal/ State Compliance [Employer/ACA Tool]
• Marketplace response [Employer/ ACA Tool/ Service Vendor]
Basics • Eligibility & Tracking
[Payroll/HR/Report Writing/ ACA Tool]
• Plan affordability & Minimum design requirements & benefit costs [Employer/Lockton]
Who will typically handle the process:
Data You May Not Be Capturing
Employee Offer of Coverage Code for each month in plan year (Part II, Row 14, 1095-C)
Employee share of the lowest monthly premium (minimum value where applicable) (Part II, Row 15, 1095-C)
Employee Applicable 4980H Safe Harbor Code by Month (Part II, Row 16, 1095-C)
Social Security Numbers for dependents enrolled on your medical benefits plan (Part III, 1095-C)
Name of person to contact and contact number at Applicable Large Employer Member (Part I, Rows 15-16, 1094-C)
Total count of 1095-C documents submitted with 1094-C transmittal (Part I, Row 18, 1094-C)
Full-time employee count by month (Part III, Rows 23-35, Column B, 1094-C)
Total employee count by month (Part III, Rows 23-35, Column C, 1094-C)
Aggregated group information when applicable (Part IV, 1094-C)
Place to document employee Notice of Subsidy form, with aggregated data for reconciliation or defense (when required)
COBRA Participant information
4 Levels of Vendor Support
Data Aggregation, Form Population,
History
Eligibility, Affordability, Dashboards, Strategic Tools
ACA Consulting Services, Strategic Analysis, Administration Services
*Vendors are updating their capabilities daily. Check with your HRIS vendors or with the HR Technology & Outsourcing Practice for current status and roadmaps.
Some HR Technology vendors provide multiple levels of
support, some may provide all levels.
ACA Support
Peek behind the curtain
• Service Vendors $2.00-$8.00 PEPM.
• Vendors to Create and Distribute IRS forms: typically $3.00-$5.00 PEPY.
• ACA Compliance Vendors typically priced between $0.35-$1.35 PEPM.
• Implementation costs can run from $750 - $15,000. Greater complexity can add additional costs.
• Implementation timelines run from 12-16 weeks depending upon vendor, how ‘clean’ the data is and services provided.
• Lockton Technology Outsourcing Practice has researched HRIS vendors capabilities. We have negotiated pricing with select ACA vendors and can provide estimates to Lockton Account Teams and Clients. Please let us know how we can be of assistance.
*estimates as of March 2015
Vendor Selection & Implementation Support
Lockton’s HR Technology and Outsourcing Practice
Objective Advisor
Solution Matchmaker
Technology Translator
Questions
You may submit questions using the Q&A box on your computer screen. Please wait until we near the end of the presentation—or leave the topic to which your question pertains—before submitting your question.
QUESTIONS?
Questions? Ask them on Twitter: #LocktonACA Follow us on Twitter @LocktonBenefits
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Our Mission
To be the worldwide value and service leader in insurance brokerage, employee benefits, and risk management
Our Goal
To be the best place to do business and to work
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