6055 – 6056 Reporting...The ACA created new reporting requirements under section 6055 and 6056 !...

6055 – 6056 Reporting

Presented by: Greg Stancil, RHU, ChHC Director of Health Care Reform Scott Benefit Services

This Scott Benefit Services presentation is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Employers should contact legal counsel for legal advice.

Overview

§ The ACA created new reporting requirements under section 6055 and 6056

§ The additional reporting is intended to promote transparency with respect to health plan coverage and costs

§  It will also provide the government with information to administer other ACA mandates, such as the employer shared responsibility requirements and the individual mandate

Overview

§ Final rules were released on March 5, 2014 § They apply for calendar years beginning after

12/31/14 –  This reflects a 1 year delay –  The IRS encourages voluntary compliance for 2014

§ Final versions of the forms for the 2014 filing were issued on 2/8/15.

–  The forms we will discuss today are for the 2014 filing –  The possibility exists that there could be changes for 2015

Overview

§ Because of the nature of the information that will be required to be reported, in most cases employers will rely on the payroll/HRIS vendor to assist with data collection and IRS reporting

§  If that is not an option there are other vendors who can assist and file forms to the IRS on behalf of the employer

§ There are also data aggregation tools if an employer chooses to “DIY”

Overview

TYPE OF REPORTING AFFECTED EMPLOYERS REQUIRED INFORMATION EFFECTIVE DATE

Code §6055—Reporting of health coverage by health insurance issuers and sponsors of self-insured plans

Employers with self-insured health plans

Information on each individual provided with coverage (helps the IRS administer the ACA’s individual mandate) Delayed until 2015

The first returns will be due in 2016 for

coverage provided in 2015 Code §6056—Applicable large

employer (ALE) health coverage reporting

Applicable large employers (those with at least 50 full-time employees, including full-time equivalents)

Terms and conditions of health plan coverage offered to full-time employees (helps the IRS administer the ACA’s employer shared responsibility penalty)

Overview

ALEs that sponsor self-insured plans

ALEs that sponsor insured plans

Non-ALEs that sponsor self-insured plans

Non-ALEs that sponsor insured plans

Complete:

Form 1094-C

+

Both sections of Form 1095-C

Complete:

Form 1094-C

+

The section of Form 1095-C addressing the information

under Section 6056

File:

Form 1094-B

+

Form 1095-B These employers are not required to report under either Section

6055 or Section 6056. To report:

(1) Information under Section 6055 about health coverage provided; and

(2) Information under Section 6056 about offers of health coverage.

To satisfy the Section 6056 reporting requirements. These employers are not required to report under Section 6055.

To satisfy the Section 6055 reporting requirements. These employers are not required to report under Section 6056.

Reporting Requirements - 6055

§ Reporting entities include health insurance issuers, self-insured plan sponsors, government-sponsored programs and other entities that provide Minimum Essential Coverage

§ The information is intended to provide the IRS with information necessary to administer various ACA mandates

§ Must be filed with the IRS by 2/28 (3/31 if filing electronically) of the year after the calendar year for which is being reported


§ Sponsors of self insured health plans –  The employer is the plan sponsor of a single employer

plan –  For a multi-employer plan the sponsor would be the

association, committee, joint board of trustees or other group of representatives who establish or maintain the plan

§ Coverage not subject to reporting –  HRA –  HSA –  Onsite medical clinic –  Medicare part B (part A does require) –  Wellness programs attached to other MEC –  MEC that supplements a primary plan of the same plan

sponsor or that supplements government sponsored coverage (Medicare)


§ Any entity required to file at least 250 returns under 6055 must file electronically. Under 250 have the option but it isn’t required.


§ Must also provide individual statements to the employee by 1/31 of the year following. They must include:

–  The policy number –  Name, address and contact number for reporting entity –  Information required to the reported to the IRS

§ Can include with W2 in same mailing § For self-funded clients this can be a combined form

1095-C


Reporting Requirements – Self Insured Plans § An applicable large employer (ALE) that sponsors a

self insured plan will be subject to both 6055 and 6056 reporting requirements, they will report on form 1095-C and complete additional sections to report the required information

§ A non-ALE that sponsors a self insured plan will be subject to only 6055 reporting requirements and will file the 1094-B and 1095-B.

Reporting Requirements – 6056 Overview

§ The 6056 applies to “Applicable Large Employers” (ALE) which is defined as an employer that employed on average at least 50 full time employees (including full time equivalents)

–  Only ALE’s with full time employees are subject to filing –  Must be filed with the IRS by 2/28 (3/31 if filing electronically) of the

year after the calendar year for which is being reported –  If filing over 250 returns you must file electronically –  If an ALE isn’t self funded they will only complete sections of 1095-C

specific to 6056 –  Must file 1094-C and 1095-C for general reporting method

–  An ALE member is defined as any applicable large employer or member of an aggregated group that is determined to be an ALE

–  For purposes of 6056 each ALE member must file an information return to the IRS and furnish a statement to its full-time employees using it’s own EIN

–  Regarding Multiemployer plans reporting may be provided in a bifurcated manner:

–  One return filed by the multiemployer plan administrator would pertain to the employees eligible to participate in the multiemployer plan, and;

–  A separate return filed by the employer would pertain to the remaining full-time employees not eligible to participate

Reporting Requirements – 6056 Overview

Reporting Requirements – 6056 (1094-C)

§  ALE’s name, address, EIN and contact information §  Total number of 1095-C form submitted §  Additional information if a government entity or part of an

aggregated group §  Certification of MEC coverage offer to employees and dependents

by month §  Number of full time employees for each calendar month during the

calendar year §  Number of total employees for each calendar month during the

calendar year

Complete lines 1-8 with all appropriate employer information. Complete 9-16 only if Designated Government Entity.

Complete line 18 by indicating how many total 1095-C forms will be submitted to the IRS along with this transmittal

•  If this is the only transmittal then check this box and continue.

•  If multiple 1094-C forms are being completed and this is the authoritative transmittal then check this box and continue.

•  If multiple 1094-C forms are being completed and this is not the authoritative transmittal do not check the box and leave the remainder of the form (expect the signature below) blank.

If you checked the box in line 19 then complete line 20 by indicating the total number of form 1095-C that is filed by and /or on behalf of the ALE. If this is the only transmittal this number should typically match line 18.

•  If for all 12 months of the calendar year, the employer was not a member of an Aggregated ALE Group check No and to not complete Part III. D or Part IV.

•  If during any moth of the calendar year the employer was a member of an Aggregated ALE Group, check Yes. If you check Yes, also complete Part III column D and part IV.

Check all of the boxes that apply based on the following descriptions:

Reporting Requirements – 6056

§ Certifications of Eligibility: –  Qualifying Offer Method –  Qualifying Offer Method – Transition Relief –  Section 4980H Transition Relief –  98% Offer Method

Qualifying Offer Method

§ The first alternative method applies with respect to an ALE that certifies on its transmittal form that it offered certain coverage (a qualifying offer) to one or more of its full-time employees.

§ A “qualifying offer” occurs when, for all months during the year in which the employee was a full-time employee with respect to whom an employer shared responsibility penalty could apply, the ALE:

–  Offers MEC providing minimum value at an employee cost for self-only coverage of less than 9.5 percent of the mainland single federal poverty line to one or more of its full-time employees; and

–  Offers MEC to the employee’s spouses and dependents.



For employees who received a qualifying offer for all 12 months of the calendar year, the ALE will be treated as complying with Section 6056 if it takes the following two steps:

1. Report simplified Section 6056 return information with respect to those employees. The ALE will file Form 1095-C with the IRS, providing only the employee’s name, SSN and address, and indicating (using the Qualifying Offer code 1A) that a qualifying offer was made for all 12 months of the calendar year. The ALE also will not report the dollar amount for any month for the employee’s share of the lowest cost monthly premium for self-only coverage providing minimum value offered to that employee. An employer may not, for any month, use code 1A and also report this dollar amount.

2.  Provide a simplified employee statement in lieu of a copy of the Form 1095-C to each full-time employee who received a qualifying offer for all 12 months. This statement must include the employer’s name, address and EIN, and must inform the employee that the employee (and his or her spouse and dependents, if any) received a qualifying offer for all 12 months of the calendar year, and therefore are generally ineligible for a premium tax credit for all of those 12 months. In addition, this statement must direct the employee to see IRS Publication 974, Premium Tax Credit (PTC) (currently in draft form), for more information on eligibility for the premium tax credit.


§ Employer may not provide a simplified employee statement in lieu of a copy of the 1095-C for any FTE who enrolled in self-insured coverage even if they received a QO for all 12 months

§ Needs to include Part III of 1095-C § Can provide a copy of 1095-C filed to IRS § For any employee who received QO for less than 12

months must use the general method


Qualifying Offer Method – Transition Relief for 2015 §  This is solely for 2015 §  To utilize this method the ALE must certify that it has made a

qualifying offer to at least 95% of full time employees and their spouses and dependents

§  As stated previously employers will generally have to use the general method for any employees that didn’t receive a QO for all 12 months

§  However solely for 2015 if the offer was made to 95% of employees an employer can take the two simplified steps described in the previous method….and use the following:

Qualifying Offer Method – Transition Relief

§  The Qualifying Offer code 1A for any months for which the employee received a qualifying offer; or

§  The Qualifying Offer Method Transition Relief code 1I for any months for which the employee did not receive a qualifying offer.

An employer may not, for any month, use code 1A or code 1I and also

report the dollar amount for the employee’s share of the lowest cost monthly premium for self-only coverage providing minimum value.

Section 4980H Transition Relief

§ This would apply when an employer is eligible under one of the following:

–  2015 Section 4980H Transition Relief for ALEs with fewer than 100 Full-Time employees (including Full-Time Equivalents)

–  2015 Transition Relief for Calculation of Assessable Payments Under Section 4980H(a) for ALEs with 100 or more Full-time employees (including Full-Time Equivalents)

98% Offer Method

§ ALEs offering affordable coverage that meets minimum value to at least 98 percent of its employees for whom they are filing a 1095-C may provide section 6056 reporting without determining whether each employee offered coverage is a full-time employee and without specifying the number of full-time employees.

§ Offer would be to at least 98% of employees on whom it reports in its 6056 return

§ Coverage is considered affordable if any of the affordability safe harbors are met

§ The main point of this alternative method is for employers who don’t want to have to determine who is full time versus who is part time for 6056 reporting and to avoid the 4980H(a) penalty

98% Offer Method

Check all of the boxes that apply based on the following descriptions:

•  If minimum essential coverage was offered to at least 95 (70)% of full-time employees and their dependents for the entire calendar year enter X in the Yes checkbox on line 23

•  If minimum essential coverage was offered to at least 95 (70)% of full-time employees and their dependents for only certain calendar months, enter X in the Yes checkbox for each applicable month.

•  For the months, if any, for which minimum essential coverage was not offered to at least 95 (70)% of full-time employees and their dependents, enter X in the No checkbox for each applicable month

•  If minimum essential coverage was NOT offered to at least 95 (70)% of full-time employees and their dependents for the any of the calendar year enter X in the No checkbox on line 23

An employer may be eligible for various types of transitional relief that could allow them to check Yes to some or all months of the calendar year: •  Transition Relief if offered to

70% •  Transition relief for certain

arrangements not offering dependent coverage

•  Transition relief for non-calendar year plans

•  Transition relief for January 2015

•  Enter the number of full-time employees for each month, but do not count any employee in a Limited Non-Assessment Period.

•  If the employer certified that it was eligible for the 98% offer method by selected box D on line 22 it is not required to complete this column.

Enter the total number of full-time employees and non full-time employees and employees in a Limited Non-Assessment period for each calendar month Employer must choose one of the following days to determine the number:

•  First of month •  Last day of month •  First day of first payroll •  Last day of first payroll

Employer must complete this column if it checked Yes on line 21, indicating that during any month of the calendar year it was a member of an Aggregated ALE group.

•  If the employer certifies by selecting box C on line 22, that it is eligible for the 50-99 relief enter code A

•  If the employer certifies by selecting box C on line 22, that it is eligible for the 100 or more relief enter code B

•  An employer will not be eligible for both

An employer must complete this section if it checked Yes on line 21. May list up to 30 members.

Reporting Requirements – 6056 (1095-C)

§  Name, address and SSN of each FTE and the months they were covered under the employer sponsored plan

§  Name, address and TIN of employer §  For each FTE the months in the year that MEC was available §  Each FTE’s contribution of the lowest cost premium for coverage

providing minimum value by calendar month §  Any applicable safe harbor for the employee

§  Self-insured plans will have to provide additional information on each individual covered

•  Enter Name, SSN and address of employee •  Enter Name, EIN, address and phone number for

employer

Must complete using one of the following indicator codes

1095-C II.14 Indicator Codes

•

•

• •

• •

1B Minimum essential coverage providing minimum value offered to employee only.

1C Minimum essential coverage providing minimum value offered to employee; andAt least minimum essential coverage offered to dependent(s) (not spouse).

1D Minimum essential coverage providing minimum value offered to employee; andAt least minimum essential coverage offered to spouse (not dependent(s)).

1A

Qualifying Offer:Minimum essential coverage providing minimum value offered to full-‐time employee with employee contribution for self-‐only coverage equal to or less than 9.5% mainland single federal poverty line (FPL); andAt least minimum essential coverage offered to spouse and dependent(s).


• •

• • •

• • 1G

Offer of coverage to employee who:Was not a full-‐time employee for any month of the calendar year; andEnrolled in self-‐insured coverage for one or more months of the calendar year.

Enter code 1G in the 'ALL' box and do not complete the monthly boxes.

1H No offer of coverage (employee not offered any health coverage or employee offered coverage that is not minimum essential coverage).

1E Minimum essential coverage providing minimum value offered to employee; andAt least minimum essential coverage offered to dependent(s) and spouse.

1F

Minimum essential coverage NOT providing minimum value offered to:Employee; orEmployee and spouse or dependent(s); orEmployee, spouse and dependents.


• • •

1I

Qualifying Offer Transition Relief 2015—Employee (and spouse or dependents) received:No offer of coverage;An offer that is not a qualifying offer; orA qualifying offer for less than 12 months.

Only complete line 15 if 1B, 1C, 1D, or 1E is entered on line 14

Enter applicable code (if any) from the following list of indicator codes


• •

• •

2C

Employee enrolled in coverage offered. Use this code for any month in which the employee enrolled in health coverage offered by the ALE, regardless of whether any other code in this code series might also apply. If this Code 2C is used for an employee for a month, do not use any other code in this code series for that month.

Note: If the employee enrolled in employer-‐sponsored coverage, the IRS will not need any further information to determine an employer’s compliance with the employer shared responsibility rules or an employee’s eligibility for a subsidy. Employees who are enrolled in employer-‐sponsored coverage are not eligible for a subsidy (regardless of whether the coverage is affordable or provides minimum value), and therefore cannot trigger an employer shared responsibility penalty for the employer. Thus, if Code 2C is used, an employer will not need to indicate anywhere else that any affordability safe harbor was used for that month.

2AEmployee not employed during the month. Use this code if the employee was not employed on any day of the month.

Do not use this code if the individual is an employee of the ALE on any day of the month.Do not use this code for any month in which an employee terminates employment with the ALE.

2BEmployee not a full-‐time employee. Use this code if the employee:

Is not a full-‐time employee for the month; andDid not enroll in minimum essential coverage, if offered, for the month.


•

•

•

2E

Multiemployer interim rule relief. Use this code for any month for which the multiemployer interim guidance applies for that employee. This multiemployer interim guidance provides that an ALE is treated as offering health coverage to an employee if the ALE is required by a collective bargaining agreement to make contributions for that employee to a multiemployer plan that offers affordable, minimum value self-‐only coverage, and also offers health coverage to the employee’s dependents.

Although ALEs may use the Section 4980H affordability safe harbors to determine affordability, an ALE eligible for the multiemployer interim guidance for an employee for a month should enter this code 2E, and not a Section 4980H affordability safe harbor code (Codes 2F, 2G, or 2H).

2F

Section 4980H Affordability Form W-‐2 Safe Harbor. Use this code if the ALE used the Form W-‐2 safe harbor to determine affordability for this employee for the year. The Form W-‐2 safe harbor measures affordability of employer-‐sponsored coverage based on an employee’s Form W-‐2 wages (reported in Box 1) from that ALE.

If an employer uses this safe harbor for an employee, it must be used for all months of the calendar year for which the employee is offered health coverage.

•

2D

Employee in a Section 4980H(b) Limited Non-‐Assessment Period. Use this code for any month during which an employee is in a Limited Non-‐Assessment Period. A Limited Non-‐Assessment Period is a period during which an ALE will not be subject to a Section 4980H penalty for a full-‐time employee, regardless of whether that employee is offered health coverage during that period.

If an employee is in an initial measurement period, use this Code 2D for the month, and not Code 2B (employee not a full-‐time employee).

If the ALE is also eligible for the multiemployer interim rule relief for this employee for the month, enter Code 2E, and not this Code 2D.


2GSection 4980H Affordability Federal Poverty Line Safe Harbor. Use this code if the ALE used the federal poverty line safe harbor to determine affordability for any month(s). The federal poverty line safe harbor measures affordability of employer-‐sponsored coverage based on the federal poverty line for a single individual in effect within six months before the first day of the plan year.

2HSection 4980H Affordability Rate of Pay Safe Harbor. Use this code if the employer used the rate of pay safe harbor to determine affordability for this employee for any month(s). The rate of pay safe harbor measures affordability of employer-‐sponsored coverage based on an employee's rate of pay.

2INon-‐calendar year transition relief applies to this employee. Use this code if Section 4980H(b) non-‐calendar year transition relief applies to this employee for the month. If certain conditions are met, an ALE that has a non-‐calendar year plan may be treated as offering minimum essential coverage that is affordable and provides minimum value for the months prior to the 2015 plan year.

•  Complete part III ONLY if the employer offers employer-sponsored self-insured health coverage in which the employee or other individual is enrolled. If the employer is completing part III enter an X in in the checkbox.

•  Then complete columns A-E for each individual covered through the employee’s enrollment. They must all be included in Part III


§ Employee Statement Requirements –  Employer’s name, address and EIN –  Information required to be shown on the 6056 with respect

to the full time employee –  A copy transmittal form for 6056 is not required –  Under certain alternative reporting methods other

methods of furnishing information to employees may be allowed

–  Must be provided by 1/31 of the year following coverage –  Must get consent to deliver electronically


§ Employee Statement Requirements (cont) –  The consent to receive electronically must specifically

identify each form –  Can be included in the same mailing as the W2 –  Can be a copy of the 1095-C –  If mailed must be sent to the last known permanent

address, if not known the temporary address. –  Must be provided to all full time employees who averaged

30 hours or more for one or more months in the calendar year (even people being measured)

Penalties §  The final regulations include short term relief from penalties to allow

additional time to develop appropriate procedures for data collection and compliance with these new reporting requirements. For returns and statements filed and furnished in 2016 to report offers of coverage in 2015, the IRS will not impose penalties on reporting entities that can show they make good faith efforts to comply with the information reporting requirements.

§  This relief is provided only for incorrect or incomplete information reported on the return or statement, including social security numbers, TINs or dates of birth. No relief is provided for reporting entities that do not make a good faith effort to comply with these regulations or that fail to timely file an information return or statement.

Questions to Ask Your Payroll/HRIS Vendor

§ What capabilities do I currently have for 6055-6056 reporting

§ Do I need to purchase a new module or version to get those capabilities

§  Is there a charge for the 6055-6056 package (implementation, one-time or PEPM)

§ Does your service only include data collection or also IRS filing (is there a separate charge for filing)

§ Am I currently inputting all salient data

ACA Radar

§ King v/s Burwell (3/4) § Notice 2015-16 (Cadillac Tax) § Notice 2015-17 (Premium reimbursement) § Look Back Measurement Period

6055 – 6056 Reporting...The ACA created new reporting requirements under section 6055 and 6056 !...

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Transcript of 6055 – 6056 Reporting...The ACA created new reporting requirements under section 6055 and 6056 !...