HR COMPLIANCE CRASH COURSE:PREPARING FOR 6055 AND 6056 REPORTING REQUIREMENTS

These materials are general in nature and are not intended as legal or tax advice. Readers and listeners should consult their own legal or tax professionals to discuss how these matters relate to their specific circumstance.

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WHO’S ON THE LINE

BARB RANDHNI Compliance Advisorbrand@hni.com

ANDREA TARRELLHNI Marketing Directoratarrell@hni.com

TOPICS TO BE COVERED

• WHY is Reporting Required?

• WHO is Required to Report to WHOM?

• WHAT is Required to Be Reported?

• WHEN is Reporting Delivered and Filed?

• HOW are the Reports Delivered and Filed?

• Path to Compliance

• Questions

WHY IS THE REPORTING REQUIRED?“Shared Responsibility” provisions of the Affordable Care Act require:

• All individuals to purchase Minimum Essential Coverage (“MEC”) or pay a penalty

For 2015, the greater of $325 or 2% of household income, capped at the average cost of a “bronze” health plan.

2015 Average Cost of Bronze Plan

• Individual: $207 Per Month $2,484 Per Year• Family of 5+: $1,035 Per Month $12,420 Per Year

WHY IS THE REPORTING REQUIRED?“Shared Responsibility” provisions of the Affordable Care Act require:

• All Applicable Large Employers (“ALE”s) to:

• offer MEC to their full time employees and their dependents or pay a penalty; and

• offer MEC that is both “minimum value” and “affordable” or pay a penalty.

Children up to age 26.

The Plan’s share of total allowed cost of benefits is at least 60%.

The employee’s share of the premium for the lowest cost employee only coverage offered is less than 9.5% of household income.

An employer that employed, on average, at least 50 full time employees during prior year. (For 2015, 100 replaces 50)

6055, 6056, 1094, 1095, B, C

• Section 6055 reporting is intended to verify that an individual has Minimum Essential Coverage (“MEC”) for purposes of enforcing the ACA’s individual responsibility requirements.• “B Series” Forms

• 1095-B: To Insured Individual from Insurer

• 1094-B: Transmittal Form to IRS

• Section 6056 reporting is intended to determine whether or not an Applicable Large Employer (“ALE”) is responsible for a shared responsibility payment and/or whether or not the individual is eligible for a premium tax credit.• “C Series Forms:

• 1095-C: To Full Time Employee

• 1094-C: Transmittal Form to IRS

WHO IS REQUIRED TO REPORT TO WHOM?

FULLY INSURED PLAN(ALE)

FULLY-INSURED PLAN(NON-ALE)

SELF-INSURED PLAN(ALE)

SELF-INSURED PLAN(NON-ALE)

Employer

• 1095-C (Parts 1 and 2 Only) to all FTEs.

• 1094-C to the IRS

N/A • 1095-C to all FTEs and any other enrolled employees.

• 1094-C to the IRS

• 1095-B to insured individuals and IRS

• 1094-B to the IRS

Insurer

• 1095-B to insured individuals and IRS

• 1094-B to the IRS

• 1095-B to all insureds IRS

• 1094-B to the IRS

N/A N/A

NOTE 2: An ALE may contract with a third party to perform the reporting and filing but is ultimately responsible for any penalties associated with incorrect reporting/filing.

NOTE 1: An ALE with less than 100 FTEs and eligible for the employer mandate transitional relief until 2016 is still required to report coverage offered in 2015.

WHAT IS REQUIRED TO BE REPORTED?(GENERAL METHOD – FULLY INSURED ALE)

WHAT IS REQUIRED TO BE REPORTED?(GENERAL METHOD – SELF-INSURED ALE)

WHAT IS REQUIRED TO BE REPORTED?

Code Series 1, Offer of Coverage. 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 and at least minimum essential coverage offered to spouse and dependent(s). 1B. Minimum essential coverage providing minimum value offered to employee only. 1C. Minimum essential coverage providing minimum value offered to employee and at least minimum essential coverage offered to dependent(s) (not spouse). 1D. Minimum essential coverage providing minimum value offered to employee and at least minimum essential coverage offered to spouse (not dependent(s)). 1E. Minimum essential coverage providing minimum value offered to employee and at least minimum essential coverage offered to dependent(s) and spouse. 1F. Minimum essential coverage NOT providing minimum value offered to employee, or employee and spouse or dependent(s), or employee, spouse and dependents. 1G. Offer of coverage to employee who was not a full-time employee for any month of the calendar year and who enrolled in self-insured coverage for one or more months of the calendar year. Enter code 1G in the “All 12 Months” 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). 1I. Qualified Offer Transition Relief 2015: Employee (and spouse or dependents) received no offer of coverage, received an offer that is not a qualified offer, or received a qualified offer for less than 12 months.

WHAT IS REQUIRED TO BE REPORTED?

• Complete line 15 only if the coverage offered to the employee provided minimum value and code 1B, 1C, 1D, or 1E is entered on Line 14.

• Enter the employee share of the lowest cost minimum value employee only coverage that is offered to the employee.

• If MEC was not offered and did not provide minimum value and/or was not affordable, leave this line blank.

WHAT IS REQUIRED TO BE REPORTED?

2A. Employee was not employed on any day of the month. Do not use code 2A for a month if the individual is an employee of the employer on any day of the month. Do not use this code for the month during which an employee terminates employment with the employer.2B. Employee is not a full-time employee for the month and did not enroll in minimum essential coverage, if offered for the month.2C. Employee enrolled in coverage offered. Enter code 2C for any month in which the employee enrolled in health coverage offered by the employer, regardless of whether any other code in Code Series 2 might also apply.2D. Employee in a section 4980H(b) Limited Non-Assessment Period. Enter code 2D for any month during which an employee is in a Limited Non-Assessment Period for section 4980H(b). 2E. Enter code 2E for any month for which the multi-employer interim guidance applies for that employee. 2F. Enter code 2F if the employer used the section 4980H Form W-2 safe harbor to determine affordability for purposes of section 4980H(b) for this employee for the year. 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. 2G. Enter code 2G if the employer used the section 4980H federal poverty line safe harbor to determine affordability for purposes of section 4980H(b) for this employee for any month(s). 2H. Enter code 2H if the employer used the section 4980H rate of pay safe harbor to determine affordability for purposes of section 4980H(b) for this employee for any month(s). 2I. Enter code 2I if non-calendar year transition relief for section 4980H(b) applies to this employee for the month.

WHAT IS REQUIRED TO BE REPORTED?

• If an employee is an employee of more than one employer of the same Aggregated ALE Group during a calendar month, the employee is treated as an employee of the employer for whom the employee has

the greatest number of hours of service for that calendar month.

• If you do not have dependent SSNs, in order to use the DOB instead, you need to make two attempts, after the initial attempt, to obtain the SSN.

WHAT IS REQUIRED TO BE REPORTED?1094-C

WHAT IS REQUIRED TO BE REPORTED?1094-C

WHAT IS REQUIRED TO BE REPORTED?1094-C

WHAT IS REQUIRED TO BE REPORTED (ALTERNATIVE METHOD – QUALIFYING OFFER)

Requirements: • Satisfy the 60% minimum value • Satisfy the affordability requirement with the employee

contribution for employee-only coverage being no more than 9.5% of the mainland federal poverty line

• Offer minimum essential coverage to the employee’s spouse and children, and

• Offer coverage to the full-time employee for all 12 months of the year

Statement:• Employer name, address, and EIN • Contact name and phone number • Statement indicating that, the employee, spouse and

dependents (if any) received a Qualifying Offer and therefore are not eligible for a premium tax credit

WHAT IS REQUIRED TO BE REPORTED (ALTERNATIVE METHOD QUALIFYING OFFERTRANSITIONAL RELIEF)

Requirements:

Transition rule is only for 2015 reporting

• A full-time employee received a Qualifying Offer for less than 12 months

• Employer must also certify that it made a Qualifying Offer for one or more months of calendar year 2015 to at least 95% of its full-time employees

Statement:

• Employer name, address, and EIN

• Contact name and phone number

• Statement indicating that, the employee, spouse and dependents (if any) may be eligible for a premium tax credit for one or more months of 2015.

WHAT IS REQUIRED TO BE REPORTED (ALTERNATIVE METHOD - 98% OFFER)

Requirements:

Employer must certify it is offering affordable, minimum value coverage to at least 98% of employees and dependents for whom it is filing a Form 1095-C.

• Affordability can be based on any of the 4980H affordability safe harbors

• All full-time employees must be included in the reporting

• Must satisfy this requirement for each month of the year

Statement:

• Not required to identify which of its full time employees are full time.

WHEN IS REPORTING REQUIRED

• The information returns must be furnished to all full time employees January 31.

• The forms must be filed with the IRS by February 28 for paper filings and March 31 for electronic filing

WHEN IS REPORTING REQUIRED

• The information returns must be furnished to all full time employees January 31.

• The forms must be filed with the IRS by February 28 for paper filings and March 31 for electronic filing

HOW ARE THE REPORTS DELIVERED/FILED

• Returns for employees: Delivery by first class mail at last known mailing address.

• Filings with the IRS: Paper filings or electronic filings may be made but if more than 250 returns are included, electronic filing is mandatory.

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PATH TO COMPLIANCE

1. Identify sources for data.

2. If you haven’t yet, started compiling January data, sooner rather than later is probably your best route.

3. Storing the data in electronic format will more easily facilitate population of the individuals forms without individual data entry.

4. If you are self-insured, and do not maintain dependent social security numbers and/or dates of birth, may want to consider soliciting that information now.

5. Early education and communication to employees about the reporting that they will receive, and its purpose, may minimize confusion and communications after the forms are issued.

6. Consider partners for form compilation – stay tuned for next webinar with some examples!

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QUESTIONS?

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UPCOMING HNI U EVENTS

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THANK YOU

BARB RANDHNI Compliance Advisorbrand@hni.com

ANDREA TARRELLHNI Marketing Directoratarrell@hni.com