Affordable Care ActTracking and Reporting

Getting Ready for 2016July 9, 2015

Additions to theInternal Revenue Code

Section 6055 —Individual Mandate

Section 6056 —Employer Mandate

Confirms if individuals have satisfied the

“Individual Mandate.” This section applies to the entity that insures the

coverage.

Determines whether large employers have satisfied

the “Pay or Play” rule. This section applies to

Applicable Large Employers.

IRS Sections 6055 and 6056are about Reporting

To Individuals To The IRS

Via Form 1095-Band/or Form 1095-C

Via Form 1094-B and/or1094-C

pluscopies of the forms

provided to individuals

Non-Calendar Year Plans

• The reporting requirements and filing deadlines do not changefor non-calendar year plans.

• Data for all of 2015 must be captured and reported.

• Section 4980H Transition Relief options

Penalties for Non-Compliance• By 2019, the government expects to collect $25 billion

in penalties from businesses for failures to comply with the ACA

• Penalties for non-compliance are $250 per return, up to $3 million

• Employers who can show a good-faith effort to comply will not be penalized in 2016

Do you have 50 or more Full-time Equivalent employees?

Understanding Employer Obligations

No. Are any of your medical plans

self-insured?

Yes. As an Applicable Large Employer (ALE), you are subject to Section 6056. Are you self-insured?

Yes.You are subject to Section 6055

and will use Forms 1094-B and 1095-B.

No.You are not

subject to the new reporting requirements.

Yes.Self-insured

employers will use Forms 1094-C and 1095-C, Parts

1, 2 and 3.

No. Fully-insured

employers will use Forms 1094-C and

1095-C, Parts 1 and 2 (not Part 3).

Large Employer, Fully InsuredDo you have 50 or more Full-time Equivalent employees?

No. Are any of your medical plans

self-insured?

Yes.You are subject to Section 6055

and will use Forms 1094-B and 1095-B.

No.You are not

subject to the new reporting requirements.

Yes.Self-insured

employers will use Forms 1094-C and 1095-C, Parts

1, 2 and 3.

Yes. As an Applicable Large Employer (ALE), you are subject to Section 6056. Are you self-insured?

No. Fully-insured

employers will use Forms 1094-C and

1095-C, Parts 1 and 2 (not Part 3).

What Forms Go Where?For Fully Insured Organization:

IRS

1094 – C and 1095 – C

Provided by Employer. Sent via

mail – 2/29/16Sent electronically –

3/31/16

1094 – B and 1095 – B

Provided by the Insurance

Company. Sent via mail – 2/29/16

Sent electronically –3/31/16

1095 – C Provided by

Employer. Sent by 1/31/16

Employee

1095 – B Provided by the

Insurance Company. Sent by

1/31/16

Simplified Reporting – it isn’t simple…• There are really two different simplified reporting and furnishing methods

that apply to Section 6056

• The furnishing methods provide an alternative statement instead of a Form 1095-C to employees and includes:

• Employer name, address, and EIN.

• Contact name and telephone number at which the employee may receive information about the offer of coverage and the information on the Form 1095-C filed with the IRS for that employee.

• A statement indicating that, for all 12 months of the calendar year, the employee and his or her spouse and dependents, if any, received a Qualifying Offer and therefore are not eligible for a premium tax credit.

• A statement directing the employee to see Pub. 974, Premium Tax Credit (PTC), for more information on eligibility for the premium tax credit.

Completing 1095 C Forms

Who gets What?

• An ALE must file FORM 1095-C for each employee that worked 30 or more hours per week and/or 130 hours per month

• An ALE must also provide a completed form 1095-C to each full-time employee

• MUST be given regardless if the ALE member offers coverage, or the employee enrolls in any coverage offered

• This form will also be given to any part time employees on the plan, but does not have to report part time employees that do NOT have coverage

• Please note - As a fully insured employer the IRS and your employees will also receive a 1094-B form from your carrier, if they are participating in coverage

Completing 1095 C Forms

Part I – General Information• Lines 1-6: Employee Data

• Name, SSN, and Address• Lines 7 – 13: Applicable Large Employer Member Data

• Employer Name, FEIN, Address and Contact Phone Number

Part II – Employee Offer and Coverage• Line 14: Offer of coverage code – month by month• Line 15: Employee share of lowest cost monthly premium for SELF-

ONLY minimum value coverage. Does not have to include what the EE actually selects (ie: Family Plan).

• Line 16: Applicable Section 4980H Safe Harbor

Completing 1095 C Forms

Line 14: Offer of Coverage Codes• 1A: Qualifying Offer

• 1B: Minimum Value (MV), Minimum Essential Coverage (MEC) to employee only

• 1C: MV MEC to employee and MEC to dependent children

• 1D: MV MEC to employee and MEC to spouse

• 1E: MV MEC to employee and MEC to spouse & dependent children

• 1F: MEC (not MV) to employee, spouse and dependent children

• 1G: MEC to employee who was not FT for any month of calendar year (only

applies to PT employees and non-employees if enrolled in a self-insured plan)

• 1H: No offer of coverage

• 1I: Qualifying Offer transition relief for 2015

Completing 1095 C Forms

Line 16: Affordability Safe Harbor Codes

• 2A: Not employed on any day of the month

• 2B: Not a Full-Time employee for the month and not enrolled

• 2C: Enrolled in coverage offered (no other codes should be used)

• 2D: In limited non-assessment period (including waiting period or initial

measurement period)

• 2E: Multiemployer interim rule relief

• 2F: Form W-2 affordability safe harbor

• 2G: Federal Poverty Level affordability safe harbor

• 2H: Rate of pay affordability safe harbor

• 2I: Non-calendar year transition relief

Where is the DataPayroll W-2 and affordability safe harbor

calculation

Time Keeping Service hours for determination of full-time status

Benefits Administration Eligibility, benefit status, dependent information, coverage offer dates, waivers, employees on leave

Questions to AskFact Finding? • What are you doing to help me

with ACA Reporting?• How much does it cost

Integration? • How much time does it take to implement into our system

• Does it integrate into timekeeping, payroll, ben admin?

What does the client need to do?

• Discuss budgets and strategy• Make a decision TODAY

• Will help populate and submit 1094-C and 1095-C reports

• Implementation can take 3 - 4weeks

• Capable of integrating with payroll vendors

• Quote based on size of organization, and how many control groups

Next StepsJuly/August • Determine what information your payroll vendor

can provide• Engage SyncStream, if needed

September • Pull sample reports from relevant vendors

December • Run reports to collect data from January through November

January • Incorporate December data• Transfer data to IRS forms• Communicate to employees what reporting they

will receive and its purpose

• Utilize Ben Admin/Payroll Reporting function to complete form

February 1 • Distribute Form 1095-B or 1095-C to employees

February 29 or March 31(if filed electronically)

• All 2015 submissions due to IRS

Amanda Ericson, SPHR, SHRM-SCPDirector of HR Compliance Tel: (970) 584-1719 | Mobile: (970) 372-7885aericson@shirazibenefits.com

Shirazi Benefits8205 W. 20th St. | Greeley, CO 80634http://www.shirazibenefits.com

Supplemental material supplemented from: Presidio Benefits