IRS Reporting Regulations: 6055 & 6056IRS Reporting Regulations: 6055 & 6056 What Every Employer...

Bottom Line Driven Health Benefits Planning

IRS Reporting Regulations: 6055 & 6056

What Every Employer Needs to Know and Do Now

Jeffery A. Schultz Phone: 262.207.1999 ext. 112

Email: jschultz@beneco.co Vice President, BeneCo of Wisconsin

Innovation. Dedication. Knowledge. Purpose. Integrity. Vision. Talent. Results.

This webinar is provided for informational purposes only, not intended to be tax advice, and is not intended or written to be used, and cannot be used by the recipient to avoid any federal tax penalty that may be imposed, or to promote, market or recommend any referenced entity, investment plan or arrangement. Additionally, it is not intended to be applicable to a particular fact situation and it cannot be used to form the basis of an attorney-client relationship. Please seek competent advice to determine the applicability of this information, if any, to your particular situation.

-2- ACA 2015: Ready, Set, Comply

Who We Are

BeneCo of Wisconsin, Inc.:

A member of The Benefit Companies, a privately held company.

Have been providing insurance and employee benefits consulting since 1971.

A full service benefits firm serving over 1,200 companies and organizations ranging from 10 to 50,000 employees.

Headquartered in Brookfield, WI with additional Wisconsin offices in Green Bay, and Plymouth.

What Employers Need to Do in 2015 Ask these questions:

1. Do we understand and know how to apply the 2015 Transition Rules? 2. Have we determined if our Wellness Plan is both ACA and EEOC Compliant? 3. What is our defined strategy to avoid the 2018 Cadillac Tax? 4. Will our plan offerings be strategically affordable or unaffordable? 5. Are our systems capable of collecting the proper information for the 2016, 6055

and 6056 reporting? 6. Are we moving employees towards an ownership health care paradigm?

Contact us at: help@acacomplianceservices.com

Confidentiality Statement – Portions of the information contained in this presentation represent intellectual property and are protected for use by the intended recipient only and cannot be copied.

Guest Speakers

Kathy Tunney Director

Leslie Straus President

Jeff Schultz Vice President BeneCo of Wisconsin

Topics for Discussion

• Updated IRS Reporting Timeline • Overview of Employer Reporting Requirement

– Information You Must Collect & Disclose – Who Must Receive – When Requirements Take Effect

• Purpose of Reporting • IRS Forms • Transitional Relief • Reporting Challenges & Complexities • Planning for Reporting Requirement

IRS Reporting Update

• February 4th, 2015- IRS releases Final Reporting Forms for 2014 tax year

– 2015 Forms are not expected to change

• February 1st, 2016- Employee statements are due to employees

• February 29th, 2016 – Information due to IRS (if paper filing)

• March 31st, 2016 – Information due to IRS (if filing electronically)

– Electronic filing is required for employers with 250 or more employees

IRS Update: ACA IRS Forms are Now FINAL

IRS ACA Reporting Timeline

1. 1094- B Transmittal of Health Coverage Information Return

2. 1095-B Health Coverage

3. 1094-C Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Return

4. 1095-C Employee Statement

Update: IRS ACA Reporting Final Forms

Government website links:

www.irs.gov/form1094b

www.irs.gov/form1095b

www.irs.gov/form1094c

www.irs.gov/form1095c

Update: IRS ACA Reporting Final Forms

• Information provided will be used as part of the determination of whether or not an employee is eligible for a subsidy

• Purpose of the forms is to administer the Individual and Employer Shared Responsibility penalties

Purpose of Reporting Requirement

Confidentiality Statement – Portions of the information contained in this presentation represent intellectual property and are protected for use by the intended recipient only and cannot be copied.

• Compiling the information creates a significant administrative burden for the employer

• Reporting is compiled on a month by month basis

IRS Reporting Forms Administration

Information You Must Collect & Disclose

• Social Security Numbers of employees, spouses and dependents

• Names and employer ID numbers of other employers within their “controlled group” of employers

• Number of full-time employees for each calendar month

Employer Must Collect & Disclose

• Months of coverage for each covered individual

• Employee’s share of the lowest-cost monthly premium for self-only, minimum value coverage for each calendar month

• The applicable “Safe Harbor” for each calendar month

• Certifications of eligibility

• Months in which you offered minimum essential coverage by employee

• Months in which you as an employer were a member of a “controlled group”

Goal of the C Forms (1094-C & 1095-C)

Report to the IRS an employer’s compliance with the Employer Mandate and provide individual taxpayers’ tax records

Certify employee categories for their stability period:

Full Time vs Part Time

Certify plans offered meet 4980h requirements and indicate who

was offered coverage:

MEC, MV, Coverage availability, Affordability

Help employees avoid paying individual

mandate tax if not necessary

Certifying Stability Period Results

Measurement Period

Results for Each

Employee: Full-Time

or Part-Time

1095-C 1094-C

Full-Time

Part-Time

Offered & Enrolled

Offered & Waived

Not Offered

Offered & Enrolled

Parts I, II, III

Parts I, II

Parts I, II, III

Total Employee Count

Total Full-Time Count

Not Offered or

Offered & Waived

Certifying Affordability Results

Coverage Type

Offered and Monthly

Self-only Low Plan

1095-C

Full-Time

>1 Month Part-Time

Offered & Enrolled

Offered & Waived

Not Offered

Offered & Enrolled

Part II, Lines 14-16

Part II, Lines 14 & 16

Unionized*

Employee

contribution? Part II, Lines 14-16

* Only if plan administered by a multi-employer plan

Who Must Receive the Information?

• Information is required to be reported to all full-time employees, including whether an offer of health coverage was or was not made

• Self Insured Plans must report for all enrolled regardless of their full-time status

• Applies to all large employers regardless of whether you offer health coverage to all, none, or some of your full-time employees

Who Must Receive

• Fully Insured Employers

– 1095-C statement from the Employer

• Parts I & II only

– 1095-B statement from the Insurance Carrier

• Self-Funded Employers

– 1095- C statement from the Employer

• Parts I, II & III

Where is the employee getting information from?

IRS Forms

1094-B

1095-B

1094-C

1095-C

Form 1095-C, Part II

Code Series 1, Offer of Coverage

Code Description

1A Qualifying Offer: MEC/MV with employee contribution for self-only coverage equal to or less than 9.5% mainland single federal poverty line and at least MEC offered to spouse and dependent(s).

1B MEC/MV offered to employee only.

1C MEC/MV offered to employee & MEC offered to dependents.

1D MEC/MV offered to employee & MEC offered to spouse.

1E MEC/MV offered to employee & MEC offered to dependents and spouse.

1F MEC 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.

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

1I Qualifying Offer Transition Relief 2015

Form 1095-C, Part II

Code Series 2—Section 4980H Safe Harbor Code

Code Description

2A Employee not employed during the month

2B Employee not a full-time employee

2C Employee enrolled in coverage offered

2D Employee in a section 4980H(b) Limited Non-Assessment Period

2E Multiemployer interim rule relief

2F Section 4980H affordability Form W-2 safe harbor

2G Section 4980H affordability federal poverty line safe harbor.

2H Section 4980H affordability rate of pay safe harbor

2I Non-calendar year transition relief applies to this employee

Examples

Part II Coding Examples

Assumptions for all examples

– ALE with FT > 1000

– Utilizing Look-back Measurement Method with a Jan 1 – Dec 31 Stability Period

– Offering Self-Insured MEC / MV to Full-time Employees and Dependents

– Hourly Employee Rate of Pay is $25.00

Part II Examples: Incorrect Entry

Mason was an ACA Full-time employee (30 hours per week) enrolled in coverage whose hours are reduced to part-time (25 hours per week) on June 1st.

Part II Employee Offer and Coverage

14 Offer of Coverage (enter required code)

All 12 Months Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec

1E 1E 1E 1E 1E 1H 1H 1H 1H 1H 1H 1H

15 Employee Share of Lowest Cost Monthly Premium, for Self-Only Minimum Value Coverage

$300.00 $300.00 $300.00 $300.00 $300.00 $ $ $ $ $ $ $

16 Applicable Section 4980H Safe Harbor (enter code, if applicable)

2C 2C 2C 2C 2C 2B 2B 2B 2B 2B 2B 2B

Part II Examples: Correct Entry

$300.00 $ $ $ $ $ $ $ $ $ $ $ $

Mason was an ACA Full-time employee (30 hours per week) enrolled in coverage whose hours are reduced to part-time (25 hours per week) on June 1st.

Carol was an ACA Full-time employee (40 hours per week) enrolled in coverage, terminated on May 25th. She was rehired on Aug 3rd.

1B 1B 1B 1B 1B 1H 1H 1H 1H 1B 1B 1B

$300.00 $300.00 $300.00 $300.00 $300.00 $ $ $ $ $300.00 $300.00 $300.00

2C 2C 2C 2C 2C 2A 2A 2D 2D 2C 2C 2C

Part II Examples: Correct Entry

1B 1B 1B 1B 1B 1H 1H 1B 1B 1B 1B 1B

$300.00 $300.00 $300 .00 $300 .00 $300 .00 $ $ $300.00 $300.00 $300.00 $300.00 $300.00

2C 2C 2C 2C 2C 2A 2A 2C 2C 2C 2C 2C

Carol was an ACA Full-time employee (40 hours per week) enrolled in coverage, terminated on May 25th. She was rehired on Aug 3rd.

Rachel was an ACA Full-time employee (Salary 60K) enrolled in coverage, terminated on July 25th. She was rehired on Oct 3rd as full-time (Salary 55K) and waived coverage. Part II Employee Offer and Coverage

1C 1C 1C 1C 1C 1C 1C 1H 1H 1C 1C 1C

$300.00 $300.00 $300.00 $300.00 $300.00 $300.00 $300.00 $ $ $300.00 $300.00 $300.00

2C 2C 2C 2C 2C 2C 2C 2A 2A 2H 2H 2H

Part II Examples – Correct Entry

1C 1C 1C 1C 1C 1C 1C 1H 1H 1C 1C 1C

$300.00 $300.00 $300.00 $300.00 $300.00 $300.00 $300.00 $ $ $300.00 $300.00 $300.00

2C 2C 2C 2C 2C 2H 2H 2A 2A 2F 2F 2F

Rachel was an ACA Full-time employee (Salary 60K) enrolled in coverage, terminated on July 25th. She was rehired on Oct 3rd as full-time (Salary 55K) and waived coverage.

Transitional Relief

• All Applicable Large Employers must report in 2016 for each calendar month in 2015

• Employers eligible for Transitional Relief still need to report

IRS Filing Requirement Transitional Relief

Reporting Challenges & Complexities

• New ACA definitions of old terms

• New ACA terminology

• 18 Pages of Complex IRS Instructions

• Multiple IRS Forms to Complete

• Multiple Sections that change based upon specific circumstances

• Data coming from multiple systems

• Tracking of breaks in services, FMLA, military leave, jury duty

• Translation of your data into coverage codes by month

• Data integrity

• Timing of reporting – along side W-2

Reporting – What Makes This So Complex?

• Benefit/HR Teams running at 120% of capacity

• Every month you wait you must go back and get data

• An environment of changing ACA regulation

Reporting – What Makes This So Complex?

Planning for Reporting

• Get all the ACA stake holders together to discuss:

– Benefits

– Payroll

– Human Resources

– CFO

Employer Planning

IRS Reporting is not a Benefits Problem it is a Compliance Problem

• Who is responsible for accurate and timely reporting within your organization? Specifically identified on the IRS Form!

• What internal resources do you have to commit to the new reporting requirement?

• When will you start collecting the information?

• How much time will it take you to complete the required reporting?

Employer Planning

• Reading of the 18 pages of directions 2 Hours

• Understanding of the 18 pages ?

• Transmittal Forms 4 Hours

• Each Employee 1095-C 12 minutes per employee

• Compiling and verifying the data to complete the 1095C ?

IRS Time Assumptions

Employer Cost to Complete IRS Reporting?

Employer Cost To Complete IRS Reporting?

Inaccurate Reporting = IRS Penalty Notices Documentation/Tracking Are Key

• Identified specifically in the regulations

• Employer retains liability and responsibility including penalties

Hiring a Third Party Administrator

Benefit of Outsourcing - Time and Accuracy - System of Record for Defense of Penalties

• ACA Third Party Administration

• Our ACA Services Include:

– Compliance & Administration

– Compliance Testing

– Audit Documentation

– Appealing IRS Penalty Notices

– Government Reporting

How We Can Help

• Track employee ACA data

• Collect data for reporting

• ACA System of Record

• Complete IRS Reporting

• Assist you in communication and distribution of IRS Forms

• Assistance with IRS Penalty Demand Notices

• ACA Concierge Service

Government Reporting

What Employers Need to Do in 2015 Ask these questions:

1. Do we understand and know how to apply the 2015 Transition Rules? 2. Have we determined if our Wellness Plan is both ACA and EEOC Compliant? 3. What is our defined strategy to avoid the 2018 Cadillac Tax? 4. Will our plan offerings be strategically affordable or unaffordable? 5. Are our systems capable of collecting the proper information for the 2016, 6055

and 6056 reporting? 6. Are we moving employees towards an ownership health care paradigm?

We are grateful AM 620 WTMJ has asked BeneCo to host a radio series to educate listeners on how best to tackle the ins and outs of the Affordable Care Act (ACA). Focused primarily on educating: Business Owners, CEO's, CFO's and HR professionals; we will help them determine if ACA is a "Top 3" or "Top 30" business priority. Tune in to hear us discuss critical ACA challenges to business. Last WTMJ episode aired Saturday March 7th. For that podcast or others: http://www.benefitsinc.com/beneco-wisconsin/podcast-request/

To Register: http://www.benefitsinc.com/beneco-wisconsin/aca-webinars/

BeneCo Webinars Date Time 3 key strategies every employer can deploy to lower health care costs. Special Guest: Dustin Hinton, CEO, UnitedHealthcare Wisconsin/Michigan 3/25/2015 10:30-11:30

Every Employee's Alternative to COBRA 4/15/2015 10:30-11:30

ACA: All about Affordability and Choosing the Right Safe Harbor 5/3/2015 10:30-11:30

ACA: Creating a Safe Harbor Medical Plan to Immunize You Plan From Penalties 6/3/2015 10:30-11:30

Strategic Rx Spend Management 7/15/2015 10:30-11:30

When Does it Make Sense For My Plan to Pay Penalties? 8/12/2015 10:30-11:30

BeneCo Strategy Minutes

Short videos on benefits topics of the week.

Delivered once per week Examples:

Wellness and the EEOC What do to about Seasonal

Employees? Private Exchanges Stoploss Contracts and

Coverage under the stability period.

Check out our website for the most recent and archived version. http://www.benefitsinc.com/beneco-wisconsin/aca-strategy-minutes/

ACA Impact Study

ACA Impact Study How will ACA impact my organization? What do I need to plan for?

Free initial consultation Fee for service basis based on plan complexity ACA Sustainability Analysis How do I create a long term sustainable ACA cost strategy and

still comply? Fee for service basis based on plan complexity

Ask us about Haiti… The work: Orphan care and sponsorship, tent

city refugee relocation and community development, microenterprise other ministry opportunities

To get more info or engaged in some way drop us a email, or for a glimpse of the work go to www.newlife4kids.org or www.missiondiscovery.org

Jeff Schultz Vice President BeneCo of Wisconsin 262-207-1999 ext 112 jschultz@beneco.co

Justin Andaloro Manager of Marketing & Communications BeneCo of Wisconsin 262-207-1999 ext 114 jandaloro@beneco.co

For Follow up Information or Questions

To Register for upcoming webinars: http://www.benefitsinc.com/beneco-wisconsin/aca-webinars/

Questions?

IRS Reporting Regulations: 6055 & 6056IRS Reporting Regulations: 6055 & 6056 What Every Employer...

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