Affordable Care Act Tax Filing Deadlines Are Here! · 2018-03-07 · Affordable Care Act Tax Filing...

© 2015 Epstein Becker & Green, P.C. | All Rights Reserved. ebglaw.com

Affordable Care Act Tax Filing Deadlines Are Here!

October 29, 2015

•© 2015 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com

This presentation has been provided for informational purposes only and is not intended and should not be construed to constitute legal advice. Please consult your attorneys in connection with any fact-specific situation under federal, state, and/or local laws that may impose additional obligations on you and your company.

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© 2015 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com

Presented by

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Gretchen Harders

Member

[email protected]

212.351.3784

Daniel J. Green

Associate

[email protected]

212.351.3752

August Emil Huelle

Associate

[email protected]

212.351.3715

mailto:[email protected]




Introduction

Forms 1094 and 1095 help the IRS monitor whether individuals are complying with the individual mandate and whether employers are complying with the employer mandate.

The ACA tax-reporting requirements are effective for the 2015 tax year, with the requirement to deliver notices to employees by January 31, 2016. Employers will need to file tax forms with the Internal Revenue Service (IRS) by February 29, 2016, or March 31, 2016 (if filing electronically).

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Completing Forms 1094-B & 1095-B


Who Files Forms 1094-B & 1095-B?

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Forms 1094-B and 1095-B monitor compliance with the individual mandate

Type of Coverage Who Files the 1094-B/1095-B

Fully-Insured Health Insurance Issuer or Carrier

Self-Insured—Single Employer Plan Sponsor—Employer

Self-Insured—Multiple Employer Plan Sponsor—Each Participating Employer (for its own employees)

Self-Insured—Multiemployer Plan Sponsor—Board of Trustees


Who Receives Forms 1094-B & 1095-B

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Responsible Individual. The primary insured:

• Employee

• Former employee

• Parent

• Uniformed services sponsor

• Other person enrolling individuals in coverage

A responsible individual may NOT be a business or business owner that is the policy holder for its employees.


Form 1094-B: The Cover Letter

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Form 1095-B: Evidence of Coverage

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Completing Form 1095-B: Part I

Line 1: Responsible Individual: enter the name of the primary insured

Line 8: Enter the letter identifying origin of the policy

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A B C D E F

Small Business Health Option Program (“SHOP”)

Employer-sponsored coverage

Government-sponsored program

Individual Market Insurance

Multiemployer Plan

Other designated minimum essential coverage


Completing Form 1095-B: Part II

Only complete Part II if you are an issuer or carrier of insured group health plans (including coverage purchased through the SHOP)

• For coverage other than insured employer coverage, Part II will be left blank

Line 11—Employer’s EIN:

• If the employer is a member of a controlled group, enter information for the specific controlled group member that is the covered employee’s employer

• If the coverage is provided through an association or a Multiple Employer Welfare Arrangement, enter information for the participating employer of the covered employee

• Don't complete Part II if the coverage is provided through a multiemployer plan

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Completing Form 1095-B: Part III

Line 16: The provider of coverage is the

• issuer or carrier of insured coverage

• sponsor of a self-insured employer plan

• government agency providing government-sponsored coverage, or

• other coverage sponsor

Line 18: “The telephone number an individual seeking additional information may call to speak to a person”

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Completing Form 1095-B: Part IV

For each covered individual complete either Column (b) or (c) not both

Check the box in Column (d) if the individual was covered for at least one day for all 12 months of the calendar year

Page 3 of Form 1095-B provides space to enter information if there are more than six covered individuals

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Completing Forms 1094-C & 1095-C


Who Files Forms 1094-C & 1095-C?

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Forms 1094-C and 1095-C monitor compliance with the employer mandate

Type of Coverage Who Files the 1094-C/1095-C

Fully-Insured Applicable Large Employer

Self-Insured—Single Employer Applicable Large Employer

Self-Insured—Multiple Employer

Applicable Large Employer

Self-Insured—Multiemployer Applicable Large Employer


Who Receives Forms 1094-C & 1095-C

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Forms submitted to the IRS must contain each employee’s full SSN or TIN

Forms submitted to employees may contain the last four digits of that employee’s SSN or TIN

Employers should obtain an employee’s written consent to furnish a statement electronically

• Exception: For expatriate health plans, statements to individuals may be furnished in electronic format unless the recipient refuses consent.

Form 1094-C The IRS

Form 1095-C Full-Time Employees & The IRS


Form 1094-C: The Cover Letter

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Completing Form 1094-C: Part I

If you are not a Designated Government Entity (“DGE”) filing on behalf of a large employer do not complete lines 9 through 16

Line 19—Authoritative Transmittal: Employers are permitted to file multiple Forms 1094-C. However, each applicable large employer must file exactly one authoritative transmittal which reports aggregate information for that employer’s entire employee population.

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Completing Form 1094-C: Part II

Complete Part II only for an employer’s Authoritative Transmittal

Line 21―An Aggregated ALE Group refers to a group of ALE Members treated as a single employer under the Code

Line 22—Certifications of Eligibility A. Qualifying Offer Method

B. Qualifying Offer Method Transition Relief

C. Section 4980H Transition Relief

D. 98% Offer Method

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Form 1094-C: Part III

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Form 1095-C

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Completing Form 1095-C: Part I

Line 8. Enter the employer’s EIN.

• Do not enter an SSN in lieu of an EIN. Enter the 9-digit EIN including the dash. The employer’s name and EIN should match the name and EIN of the employer reported on lines 1 and 2 of Form 1094-C.

• If you are filing Form 1095-C, a valid EIN is required at the time it is filed. If a valid EIN is not provided, the Form 1095-C will not be processed.

Lines 9 and 11–13. Enter the employer’s complete address (including room or suite no., if applicable).

• This address should match the address reported on lines 3–6 of the Form 1094-C.

Line 10. Enter the telephone number of the person to contact whom the recipient may call about the information reported on the form.

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Plan Start Month. This box is optional for the 2015 Form 1095-C and the employer may leave it blank; it is anticipated that this box will be mandatory for the 2016 Form 1095-C.

• To complete the box, enter the two-digit number (01 through 12) indicating the calendar month during which the plan year begins of the health plan in which the employee is offered coverage (or would be offered coverage if the employee were eligible to participate in the plan).

• If more than one plan year could apply (for instance, if the employer changes the plan year during the year), enter the earliest applicable month. If there is no health plan under which coverage is offered to the employee, enter “00”.

Line 14. For each calendar month, enter the applicable code from Code Series 1. If the same code applies for all 12 calendar months, enter the applicable code in the “All 12 Months” box and do not complete the individual calendar month boxes, or complete all of the individual calendar month boxes.

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Line 15. Complete line 15 only if code 1B, 1C, 1D, or 1E is entered on line 14 either in the “All 12 Months” box or in any of the monthly boxes.

• Enter the amount of the employee share of the lowest-cost monthly premium for self-only minimum essential coverage providing minimum value that is offered to the employee.

Line 16. For each calendar month, enter the applicable code, if any, from Code Series 2.

• You may enter only one code from Code Series 2 per calendar month.

• The instructions address which code to use for a month if more than one code from Series 2 could apply.

• If the same code applies for all 12 calendar months, enter the applicable code in each monthly box or enter the code in the “All 12 Months” box. If none of the codes apply for a calendar month, leave the line blank for that month.

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Completing Form 1095-C: Part III

Complete Part III ONLY if the employer offers employer-sponsored self-insured health coverage in which the employee or other individual enrolled.

Not include coverage under a multiemployer plan.

If the employer is completing Part III, enter “X” in the check box in Part III. If the employer is not completing Part III, do not enter “X” in the check box in Part III.

This part must be completed by an employer offering self-insured health coverage for any individual who was an employee for one or more calendar months of the year, whether full-time or non-full-time, and who enrolled in the coverage.

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Special Issues


Special Issues: SSNs and TINs

What if you don’t have a SSN or TIN for each covered individual?

Pursuant to IRS Notice 2015-68: reporting entities will not be subject to penalties for failure to report a TIN if they:

• Make an initial solicitation of a covered individual’s TIN at that individual’s first enrollment or, if already enrolled on September 17, 2015, the next open season;

• Make a second solicitation at a reasonable time thereafter; and

• Make a third solicitation by December 31 of the year following the initial solicitation

A reporting entity is not required to solicit a TIN from an individual whose coverage is terminated

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Special Issues: Employer Identity

Each applicable large employer is required to report coverage information for its common law employees

• The common law employer must be identified in Part I of Form 1095-C

• Each common law employer must file its own separate Form 1094-C

Treas. Reg. § 54.4980H-4(b)(2): must common law employer’s report offers of coverage to contingent workers made by a staffing agency?

Who is the common law employer?

• Treas. Reg. 31.3401(c)-1(b): right to control test

• IRS Rev. Rul. 87-41: list of 20 factors to consider

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Special Issues: Multiemployer Plans

Multiemployer Arrangement Interim Guidance

• Unknown Offer of Coverage

• Per CBA, Eligible Employees and Dependents offered Affordable, Minimum Value coverage

• Enter code 1H on line 14 for any month for which the employer enters code 2E on line 16

• For 2016 and future years, reporting for offers of coverage made through a multiemployer plan may be reported in a different manner

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Special Issues: Expatriate Plans

Expatriates

• Individuals working outside the U.S. for at least 180 days in a 12-month period that overlaps with the plan year.

Inpatriates

• Individuals assigned to work in the U.S. for a specific or temporary purpose or assignment tied to employment and the individual is generally offered other multinational benefits such as tax equalization.

Although Expatriate health plans are not subject to many of the ACA market reform provisions such as annual and lifetime limits, essential health benefits, and the Summary of Benefits and Coverage requirements, the Reporting Requirements apply.

Statements to individuals reporting minimum essential coverage under or offers of employer coverage may be furnished in electronic format unless the recipient refuses consent.

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Special Issues: COBRA

Offer of COBRA coverage to former employee: do not report as an offer of coverage on Form 1095-C Part II

• Use code 1H indicating no offer of coverage

• Self funded coverage must still be reported in Part III

Offer of COBRA coverage to an active employee: report in the same manner you would report an offer of regular coverage

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Extensions to Furnish Statement to Recipients

You may request an extension of time to furnish the statements to recipients by sending a letter to Internal Revenue Service.

The letter must include (a) filer name, (b) filer TIN, (c) filer address, (d) type of return, (e) a statement that extension request is for providing statements to recipients, (f) reason for delay, and (g) the signature of the filer or authorized agent.

Your request must be postmarked by the date on which the statements are due to the recipients.

If your request for an extension is approved, generally you will be granted a maximum of 30 extra days to furnish the recipient statements.

For purposes of requesting an extension of time to furnish the statements, the term filer means the ALE Member, or the Designated Government Entity, if applicable.

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Extensions and Waivers for IRS Filings

You can get an automatic 30-day extension of time to file by completing Form 8809, Application for Extension of Time To File Information Returns.

The form may be submitted on paper, or through the FIRE System either as a fill-in form or an electronic file.

No signature or explanation is required for the extension. However, you must file Form 8809 by the due date of the returns in order to get the 30-day extension.

Under certain hardship conditions you may apply for an additional 30-day extension. See the instructions for Form 8809 for more information.

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Penalties

General reporting penalty provisions for failure to file correct information returns and failure to furnish correct payee statements apply.

• The penalty for failure to file an information return generally is $250 for each return for which such failure occurs. The total penalty imposed for all failures during a calendar year cannot exceed $3,000,000.

• The penalty for failure to provide a correct payee statement is $250 for each statement with respect to which such failure occurs, with the total penalty for a calendar year not to exceed $3,000,000.

• Special rules apply that increase the per-statement and total penalties if there is intentional disregard of the requirement to furnish a payee statement.

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Penalty Relief: Good Faith Efforts to Comply

For 2015 reporting, the IRS will not impose penalties on a filer for reporting incorrect or incomplete information if the filer can show that it made good faith efforts to comply with the information reporting requirements for 2015.

No relief is provided in the case of reporting entities that cannot show a good faith effort to comply with the information reporting requirements or that fail to timely file an information return or furnish a statement.

However, consistent with the existing information reporting rules, reporting entities that fail to timely meet the requirements still may be eligible for penalty relief if the IRS determines that the standards for reasonable cause under section 6724 are satisfied.

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QUESTIONS

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Gretchen Harders

Member

[email protected]

212.351.3784

Daniel J. Green

Associate

[email protected]

212.351.3752

August Emil Huelle

Associate

[email protected]

212.351.3715




Affordable Care Act Tax Filing Deadlines Are Here! · 2018-03-07 · Affordable Care Act Tax Filing...

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