ACA REPORTING REQUIREMENTS

Presented by Paul Mulkern

Goals of Today’s Presentation

2

Describe the Reporting Required by the ACA and Purposes Underlying the Requirements

Review the Information Required to be Reported

Identify the Parties Responsible for the Reporting

Review the Deadlines for the Report Filings

Identify the Penalties that are Tied to the Reporting

ACA Added 2 sections to Internal Revenue Code

Section 6056 – Requires

Applicable Large Employers (50+ employees) to report concerning the coverage they offered to full-time (averaging 30 hours per week) employees

Section 6055 – Requires

providers of coverage to report coverage information for the individuals (and their dependents) to whom Minimum Essential Coverage is provided

3

PURPOSE

§ 6056 – Enables IRS to

enforce EMPLOYER MANDATE and

Helps establish whether employees are eligible for subsidized coverage through the Exchange

§ 6055 – Enables IRS to

enforce the INDIVIDUAL MANDATE –

Allows individuals to demonstrate they have coverage and avoid penalties

4

§ 6056 – Forms 1094 - C and 1095 - C

§ 6055 – Forms 1094 - B and 1095 - B

REPORTING FORMS5

__________________________________

Members with 50 or more full-time employees (or 50 FTEs) must file Forms 1094-C and 1095-C

________________________________

MIIA Trust will file and serve Forms 1094-B and1095-B for all members whether more than 50 employees or less than 50 employees 6

MIIA Trust will provide a Form 1095-B to every subscriber of every member

Form 1095- B includes: Subscriber’s Name, Address and SSN Employer’s Name, Address and EIN MIIA Trust’s Name, Address, EIN and

Contact Number Subscriber and Dependents, SSN or

DOB, and Months covered

7

MIIA Trust will:

Mail a copy of her/his Form 1095-B to each subscriber on or before February 1, 2016 (January 31 is a Sunday)

File a copy of Form 1095-B for every subscriber plus Form 1094-B (transmittal form indicating the number of Forms 1095-B being filed) with IRS on or before March 31, 2016 (filing electronically)

8

FORMS 1094-C and 1095-CServed on employees and filed (with IRS) by Employer

Transmittal Form Provides Coverage Information Regarding Each of the Employer’s Full-time (Averaging 30 hours per week) Employees

Form 1094 - C Form 1095 - C

9

DEADLINES

February 1, 2016 – deadline for serving Form 1095-C upon each full-time employee (usually January 31)

February 29, 2016 – deadline for filing Forms 1095-C for each full-time employee plus Form 1094-C transmittal form with IRS

March 31, 2106 – deadline for filing C forms – filing electronically

MUST FILE ELECTRONICALLY IF FILING 250 OR MORE FORMS 1095-C

10

Service of Form 1095-C Upon Employees

Delivery generally by first class mail

Delivery by e-mail permitted if:a.) employee affirmatively consents to receive the statement in an electronic format b.) Individual may consent on paper or electronically (by e-mail). If consent is on paper, individual must confirm consent electronically

11

Section 6056

Section 6056 reporting only applies to large employers with 50 or more full-time employees and full-time equivalent employees

• The purpose of the 6056 reporting is to assist the IRS to enforce the Employer Mandate and to assist full-time employees determine whether they are eligible for a subsidized coverage through the Exchange (in Massachusetts, the Health Connector)

12

Section 6056 reporting is not required with respect to group health plans sponsored by small employers not subject to the Employer Mandate

Mid-size employers (50 to 99 FTEs) are eligible for transition relief from the Employer Mandate until 2016 but must still report under Section 6056 for 2015

13

Employer Mandate

An Employer will be subject to the Employer Mandate if it has:

50 full-time employees, or50 full-time equivalents (FTEs)

Determination based upon workforce in previous calendar year

.

14

Employer Mandate (Continued) Determining FTEs1.) For each month, after determining which employees average 30 hours per week (full-time),2.) Employer adds # of hours worked by all non-full- time employees (but not more than 120 for any individual employee) and divides by 1203.) That number, when added to the number of full-time employees for the month, provides the FTEs for that month.FTEs for each month added and divided by 12If result is less than 50, Employer not subject to Mandate

15

Employer Mandate (Continued)

2015 Transition Relief

Employer can use any consecutive 6 months in 2014 (rather than 12 months) for the calculation

Seasonal Workers1.) If an Employer’s workforce exceeds 50 full-time employees (including FTEs) for 120 days or fewer in a calendar year, and2.) the employees in excess of 50 during those 120 or fewer days were seasonal workers, the Employer will not be subject to Employer Mandate.

16

FORM 1094-C - Form 1094-C is a transmittal form to be filed with the IRS (along with the employee statements (Forms 1095-C)). Form 1094-C requires the following information:

Identifying information about the employer submitting Forms 1094-C and 1095-C

Whether the Form 1094-C is the “authoritative transmittal”

Whether the employer is part of a controlled-group of entities

Whether the employer qualifies for “transitional relief” from the Employer Mandate or whether the employer qualifies for alternative simplified reporting

Part I: Part II:

17

Indicates which months the employer offered minimum essential coverage

The number of the Employer’s full-time employees in each calendar month

The total number of the Employer’s employees in each calendar month

Whether the employer is part of a controlled-group of entities in each calendar month

Whether the employer qualifies for transitional relief from the Employer Mandate in each calendar month

The names and EINs of each entity that was in the same controlled-group of entities at any point in the calendar year

Part III: Part IV:18

Form 1095-C is the employee-specific form to be provided to each full-time employee and requires the following information:

Identifying information about the full-time employee or responsible individual

Identifying information about the employer

Information about the employer’s offer of coverage

Dollar amount of the employee’s share of the lowest-cost monthly premium for self-only minimum essential coverage offered by the employer

Whether the employee was enrolled in coverage or, if not, an indicator code regarding why the employee was not enrolled in coverage

Part I: Part II:

19

Identifying information regarding the subscriber and dependents

MIIA Trust members will not complete Part III (and will not check the box at the beginning of Part III) as the Trust will be supplying this information on Form 1095-B

Part III:20

“Affordable”

Coverage is “affordable” if the employee’s share of the premium cost for the lowest cost self-only (Individual) plan offered by the Employer is no greater than 9.56% of the employee’s annual household income.

21

Three Affordability Safe Harbors

1.) The Form W-2 wages safe harbor – affordable if employee’s share of monthly premium for lowest cost Individual coverage is less than 9.5% of Box 1 on employee’s W-2 divided by 122.) The rate of pay safe harbor –

affordable if employee’s share … less than 9.5% of employee’s hourly rate of pay multiplied by 1303.) The Federal Poverty Level safe harbor –

affordable if employee’s share … less than 9.5% of Federal Poverty Level for an Individual for that year divided by 12

22

Simplified reporting is available where the employer makes a “qualifying offer”A “qualifying offer” is where the employer offers:

- Employee-only minimum essential coverage providing minimum value for which the employee’s

share of the premium cost does not exceed 9.5% of the Mainland Federal Poverty Level for an Individual (other Safe Harbors not available); and

- Minimum essential Coverage to the employee’s spouse and dependents

23

“qualifying offer”

2015 Mainland Federal Poverty Level for an Individual = $11,770

9.5% of $11,770 = $1,118.15 $1,118.15 ÷ 12 = $93.18 per month Employer whose employees contribute

more than $93.18 per month toward the lowest cost INIDIVIDUAL plan do not make a qualifying offer

24

Employers who make qualifying offers may:- Use an indicator code rather than including the amount of the employee’s share of the lowest-cost monthly premium for self-only minimum essential coverage - Provide each employee who received a qualifying offer for all 12 months a statement that includes the following information (rather than a copy of Form1095-C):• Identifying information about the employer• Contact information for an individual responsible for answering questions about the employer’s health plan• A statement that for all 12 months of the calendar year, the employee and his or her dependents received a qualifying offer of coverage and are not eligible for a premium tax credit, and directing the employee to see IRS Pub. 974 for further information regarding eligibility for the premium tax credit

25

For 2015 OnlyIf the employer certifies to the IRS that it has made a qualifying offer, as described above, even if not for the full 12 months, to at least 95% of its full-time employees there is additional simplified reporting relief

26

Employers who make these qualifying offers in 2015 may:

-Use an indicator code rather than including the amount of the employee’s share of the lowest-cost monthly premium for self-only minimum essential coverage-Provide each employee who received a qualifying offer a statement that includes the following information (rather than a copy of Form 1095-C):• Identifying information about the employer• Contact information for an individual responsible for answering questions about the employer’s health plan• A statement that the employee and his or her dependents may be eligible for a premium tax credit in one or more months in 2015 and directing the employee to see IRS Pub. 974 for further information.

27

• An Additional simplified reporting method is available if a large employer certifies to the IRS that it offers coverage which is of minimum value and affordable (using any affordability safe harbor) to at least 98% of its full-time employees

• Employers who qualify for this simplified reporting method may omit listing the total number of the employer’s full-time employees in each calendar month on Form 1094-C

28

Penalties

Apply to:• Failure to Timely File Forms with IRS

• Failure to Timely Provide forms/statements to employees/subscribers

• Providing Incorrect Information in Forms – Including failure to provided dependent SSNs without documentation of repeated efforts to do so

29

Penalty Amounts

Penalty Type

Per Violation

Annual Maximum

Annual Maximum for Small Employers

General $100 $1.5 million $500,000

Corrected within 30 days

$30 $250,000 $75,000

Corrected after 30 days and before Aug. 1

$60 $500,000 $200,000

Intentional Disregard (no reductions apply)

$250 (or more) None N/A

30

2016 Relief from PenaltiesPenalties will not be imposed on reporting entities that can show good faith efforts to comply

Incorrect/incomplete information reported in 2016 forms (related to 2015 coverage)

Failure due to what IRS considers “reasonable cause”

No good faith effort to comply

Failure to timely file information return or furnish statement

Relief Available for: Relief Not Available

31

Penalties Are In Addition To Any

Penalties Under the Employer Mandate

32

33

SUMMARY

MIIA Trust will deliver and file Forms 1094-B and 1095-B

Your Municipality/District is responsible for Forms 1094-C and 1095-C

Please do not fill-out Part III of Form 1095-C (and do not check the box at the top of Part III)

Please coordinate with your payroll company and/or payroll provider

Please check out our Affordable Care Act web page on MIIA’s new website at www.emiia.org