IRS Reporting Regulations: 6055 & 6056IRS Reporting Regulations: 6055 & 6056 What Every Employer...
Transcript of 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: [email protected] 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.
-3- ACA 2015: Ready, Set, Comply
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: [email protected]
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
Contact us at: [email protected]
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
Contact us at: [email protected]
IRS Reporting Update
Contact us at: [email protected]
• 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
Contact us at: [email protected]
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
Contact us at: [email protected]
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
Contact us at: [email protected]
• 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
Contact us at: [email protected]
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
Contact us at: [email protected]
Information You Must Collect & Disclose
Contact us at: [email protected]
• 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
Contact us at: [email protected]
• 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
Employer Must Collect & Disclose
Contact us at: [email protected]
• 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”
Employer Must Collect & Disclose
Contact us at: [email protected]
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
Contact us at: [email protected]
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
Parts I, II, III
Total Employee Count
Total Full-Time Count
Not Offered or
Offered & Waived
Contact us at: [email protected]
Certifying Affordability Results
Coverage Type
Offered and Monthly
Self-only Low Plan
Cost
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
Contact us at: [email protected]
Who Must Receive the Information?
Contact us at: [email protected]
• 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
Contact us at: [email protected]
• 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?
Contact us at: [email protected]
IRS Forms
Contact us at: [email protected]
1094-B
Contact us at: [email protected]
1095-B
Contact us at: [email protected]
1094-C
Contact us at: [email protected]
1094-C
Contact us at: [email protected]
1094-C
Contact us at: [email protected]
1095-C
Contact us at: [email protected]
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
30
Contact us at: [email protected]
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
32
Contact us at: [email protected]
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
34
Contact us at: [email protected]
Part II Examples: Incorrect Entry
35
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
Contact us at: [email protected]
Part II Examples: Correct Entry
36
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
15 Employee Share of Lowest Cost Monthly Premium, for Self-Only Minimum Value Coverage
$300.00 $ $ $ $ $ $ $ $ $ $ $ $
16 Applicable Section 4980H Safe Harbor (enter code, if applicable)
2C
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.
Contact us at: [email protected]
Part II Examples: Incorrect Entry
37
Carol was an ACA Full-time employee (40 hours per week) enrolled in coverage, terminated on May 25th. She was rehired on Aug 3rd.
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
1B 1B 1B 1B 1B 1H 1H 1H 1H 1B 1B 1B
15 Employee Share of Lowest Cost Monthly Premium, for Self-Only Minimum Value Coverage
$300.00 $300.00 $300.00 $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 2A 2A 2D 2D 2C 2C 2C
Contact us at: [email protected]
Part II Examples: Correct Entry
38
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
1B 1B 1B 1B 1B 1H 1H 1B 1B 1B 1B 1B
15 Employee Share of Lowest Cost Monthly Premium, for Self-Only Minimum Value Coverage
$300.00 $300.00 $300 .00 $300 .00 $300 .00 $ $ $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 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.
Contact us at: [email protected]
Part II Examples: Incorrect Entry
39
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
14 Offer of Coverage (enter required code)
All 12 Months Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec
1C 1C 1C 1C 1C 1C 1C 1H 1H 1C 1C 1C
15 Employee Share of Lowest Cost Monthly Premium, for Self-Only Minimum Value Coverage
$300.00 $300.00 $300.00 $300.00 $300.00 $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 2C 2C 2A 2A 2H 2H 2H
Contact us at: [email protected]
Part II Examples – Correct Entry
40
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
1C 1C 1C 1C 1C 1C 1C 1H 1H 1C 1C 1C
15 Employee Share of Lowest Cost Monthly Premium, for Self-Only Minimum Value Coverage
$300.00 $300.00 $300.00 $300.00 $300.00 $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 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.
Contact us at: [email protected]
Transitional Relief
Contact us at: [email protected]
• 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
Contact us at: [email protected]
Reporting Challenges & Complexities
Contact us at: [email protected]
• 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
Contact us at: [email protected]
Reporting – What Makes This So Complex?
Contact us at: [email protected]
• 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
Contact us at: [email protected]
Reporting – What Makes This So Complex?
Contact us at: [email protected]
Planning for Reporting
Contact us at: [email protected]
• 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
Contact us at: [email protected]
• 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
Contact us at: [email protected]
• 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
Contact us at: [email protected]
Employer Cost to Complete IRS Reporting?
Contact us at: [email protected]
Employer Cost to Complete IRS Reporting?
Contact us at: [email protected]
Employer Cost To Complete IRS Reporting?
Contact us at: [email protected]
Inaccurate Reporting = IRS Penalty Notices Documentation/Tracking Are Key
Contact us at: [email protected]
• 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
Contact us at: [email protected]
• ACA Third Party Administration
• Our ACA Services Include:
– Compliance & Administration
– Compliance Testing
– Audit Documentation
– Appealing IRS Penalty Notices
– Government Reporting
How We Can Help
Contact us at: [email protected]
• 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
-57- ACA 2015: Ready, Set, Comply
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?
-59- ACA 2015: Ready, Set, Comply
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/
-60- ACA 2015: Ready, Set, Comply
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
-61- ACA 2015: Ready, Set, Comply
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/
-62- ACA 2015: Ready, Set, Comply
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
-63- ACA 2015: Ready, Set, Comply
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
-64- ACA 2015: Ready, Set, Comply
Jeff Schultz Vice President BeneCo of Wisconsin 262-207-1999 ext 112 [email protected]
Justin Andaloro Manager of Marketing & Communications BeneCo of Wisconsin 262-207-1999 ext 114 [email protected]
For Follow up Information or Questions
To Register for upcoming webinars: http://www.benefitsinc.com/beneco-wisconsin/aca-webinars/
-65- ACA 2015: Ready, Set, Comply
Questions?