IRS reporting requirements under the Affordable Care ActIs your business ready?

11%

Yes, we have this covered and know our current IT systems support the ACA implementation requirements

43%

We are developinga process

46%

I dont know

In a recent Ernst & Young LLP poll of more than 3,000 executives, only 11% answered that they had addressed the technology requirements for IRS and employee reporting.

The ACA reporting deadlines of January 31 for individual statements and March 31 for corporate returns are fast approaching. Most organizations have made the necessary modifications to their benefit plan structure to comply with the Affordable Care Act (ACA). These same organizations are now turning their attention to dealing with the complex IRS reporting requirements.

Items to consider as part of your IRS reporting checklist:

Have you identified all common law employees and non-employees

that will require a Form 1095-C?

Have you determined the ACA implications and reporting requirements

related to your merger and acquisition activity?

Do all entities and businesses use the same data platforms?

Does your system have the necessary logic capabilities to correctly

translate data into ACA indicator codes on a monthly basis?

Have you considered the internal cost and resources needed to create

an interface to file Forms 1094-C and 1095-C with the IRS?

Do you have the taxpayer identification numbers (TINs) for all

of your employees and their dependents?

Key questions related to the ACA excise tax and IRS reporting requirements to avoid significant exposure to penalties.

IRC 6055 and 6056 reporting remains a key concern for executives with regard to implementing ACA. Given the amount of information that must be aggregated for each employee, on a month-by-month and entity-by-entity basis, that isnt surprising. Addressing the following questions can help confirm that your organization is truly prepared.

1 Who will be responsible for completing and certifying the accuracy of the IRS Transmittal Form 1094-C and filing it with the IRS in March 2016? Who is responsible for the 1095-C employee statement creation and distribution to employees on or before February 1, 2016? Who is responsible for reporting for any non-employees enrolled in your self-insured plans (e.g., retirees, COBRA)?

2 Have you identified all source systems that contain the information necessary to complete the filing and statements? Have you identified all outside providers that might have required information (e.g., benefits administrator, COBRA administrator, third-party disability payers)?

3 Have you confirmed the information can be extracted in the format you will need to complete the filing and statements (e.g., month by month, FEIN)?

4 Who is responsible for confirming that the Forms 1095-C and 1094-C have been coded correctly and completed in compliance with the regulations and instructions? By transmitting the Forms electronically to the IRS under the employers FEIN, the employer is certifying that the information is true and accurateunder penalty of perjury.

5 Who is responsible for ensuring that your organization will not incur the IRS penalty of $100 per return transmittal to the IRS (capped at $1.5 million) and $100 per form to be provided to eligible individuals (capped at $1.5 million per occurrence) for late or erroneous filings?

6 Have you developed a process for identifying and issuing corrected filings and employee statements? Have you budgeted for any excise tax related penalties under ACA for 2015?

7 Who is responsible for responding to requests from an IRS audit? Who is responsible for the outcome of an IRS audit?

Significant technology changes may be needed for tracking employee eligibility and IRS reporting requirements

$1,500,000/entityup to

not filed on time$100/form

that is not accurate$100/return

120115CORRECTED

Form1094-CDepartment of the Treasury Internal Revenue Service

Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns Information about Form 1094-C and its separate instructions is at www.irs.gov/f1094c.

OMB No. 1545-2251

2014Part I Applicable Large Employer Member (ALE Member)1 Name of ALE Member (Employer) 2 Employer identification number (EIN)

3 Street address (including room or suite no.)

4 City or town 5 State or province 6 Country and ZIP or foreign postal code

7 Name of person to contact 8 Contact telephone number

9 Name of Designated Government Entity (only if applicable) 10 Employer identification number (EIN)

11 Street address (including room or suite no.)

12 City or town 13 State or province 14 Country and ZIP or foreign postal code

15 Name of person to contact 16 Contact telephone number

For Official Use Only

17 Reserved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18 Total number of Forms 1095-C submitted with this transmittal . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part II ALE Member Information

19 Is this the authoritative transmittal for this ALE Member? If Yes, check the box and continue. If No, see instructions . . . . . . . . . . . . . . . .

20 Total number of Forms 1095-C filed by and/or on behalf of ALE Member . . . . . . . . . . . . . . . . . . . . . . . . . .

21 Is ALE Member a member of an Aggregated ALE Group? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Yes No

If No, do not complete Part IV.

22 Certifications of Eligibility (select all that apply):

A. Qualifying Offer Method B. Qualifying Offer Method Transition Relief C. Section 4980H Transition Relief D. 98% Offer Method

Under penalties of perjury, I declare that I have examined this return and accompanying documents, and to the best of my knowledge and belief, they are true, correct, and complete.

Signature

Title

Date

For Privacy Act and Paperwork Reduction Act Notice, see separate instructions. Cat. No. 61571A Form 1094-C (2014)

Who is responsible??

Anatomy of a 1095-C

600115VOID

CORRECTEDForm 1095-CDepartment of the Treasury Internal Revenue Service

Employer-Provided Health Insurance Offer and Coverage Information about Form 1095-C and its separate instructions is at www.irs.gov/f1095c.

OMB No. 1545-2251

2014Part I Employee

1 Name of employee 2 Social security number (SSN)

3 Street address (including apartment no.)

4 City or town 5 State or province 6 Country and ZIP or foreign postal code

Applicable Large Employer Member (Employer) 7 Name of employer 8 Employer identification number (EIN)

9 Street address (including room or suite no.) 10 Contact telephone number

11 City or town 12 State or province 13 Country and ZIP or foreign postal code

Part II Employee Offer and CoverageAll 12 Months Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec

14 Offer of Coverage (enter required code)

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

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

Part III Covered Individuals If Employer provided self-insured coverage, check the box and enter the information for each covered individual.

(a) Name of covered individual(s) (b) SSN(c) DOB (If SSN is

not available)(d) Covered

all 12 months(e) Months of Coverage

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

17

18

19

20

21

22

For Privacy Act and Paperwork Reduction Act Notice, see separate instructions. Cat. No. 60705M Form 1095-C (2014)

Part I

Part II

Part III

Part I

Part III

Part II

Part I Description Line(s) System(s) Complexities

Employee demographic info.name, SSN, address

1 - 6 HRIS

Employer demographic info:name, EIN, address, contact info

7 - 13 Payroll Multiple 1095-C forms possible if full-time employee in more than one FEIN during reporting year

600115VOID

CORRECTEDForm 1095-CDepartment of the Treasury Internal Revenue Service

Employer-Provided Health Insurance Offer and Coverage Information about Form 1095-C and its separate instructions is at www.irs.gov/f1095c.

OMB No. 1545-2251

2014Part I Employee

1 Name of employee 2 Social security number (SSN)

3 Street address (including apartment no.)

4 City or town 5 State or province 6 Country and ZIP or foreign postal code

Applicable Large Employer Member (Employer) 7 Name of employer 8 Employer identification number (EIN)

9 Street address (including room or suite no.) 10 Contact telephone number

11 City or town 12 State or province 13 Country and ZIP or foreign postal code

Part II Employee Offer and CoverageAll 12 Months Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec

14 Offer of Coverage (enter required code)

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

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

Part III Covered Individuals If Employer provided self-insured coverage, check the box and enter the information for each covered individual.

(a) Name of covered individual(s) (b) SSN(c) DOB (If SSN is

not available)(d) Covered

all 12 months(e) Months of Coverage

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

17

18

19

20

21

22

For Privacy Act and Paperwork Reduction Act Notice, see separate instructions. Cat. No. 60705M Form 1095-C (2014)

Part I

600115VOID

CORRECTEDForm 1095-CDepartment of the Treasury Internal Revenue Service

Employer-Provided Health Insurance Offer and Coverage Information about Form 1095-C and its separate instructions is at www.irs.gov/f1095c.

OMB No. 1545-2251

2014Part I Employee

1 Name of employee 2 Social security number (SSN)

3 Street address (including apartment no.)

4 City or town 5 State or province 6 Country and ZIP or foreign postal code

Applicable Large Employer Member (Employer) 7 Name of employer 8 Employer identification number (EIN)

9 Street address (including room or suite no.) 10 Contact telephone number

11 City or town 12 State or province 13 Country and ZIP or foreign postal code

Part II Employee Offer and CoverageAll 12 Months Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec

14 Offer of Coverage (enter required code)

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

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

Part III Covered Individuals If Employer provided self-insured coverage, check the box and enter the information for each covered individual.

(a) Name of covered individual(s) (b) SSN(c) DOB (If SSN is

not available)(d) Covered

all 12 months(e) Months of Coverage

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

17

18

19

20

21

22

For Privacy Act and Paperwork Reduction Act Notice, see separate instructions. Cat. No. 60705M Form 1095-C (2014)

Part II

Part II Description Line(s) System(s) Complexities

Information regarding offer of coverage made to employee

14 HRIS, Payroll, TPAs

Indicate whether or not employee is under an offer of coverage if so, indicate the type of coverage offered, for each month (if employee is full-time, as defined by ACA, indicator codes will be different additionally, if employer qualifies for and utilizes alternative reporting methods the codes will be different)

Information regarding cost of coverage offered

15 HRIS, TPA Report amount of lowest cost self-only premium offered to employeefor each month; amount can change if employment status changes and employee becomes eligible for different plans at different rates

Information regarding affordability of coverage offered

16 Payroll, HRIS, TPA

For each month, enter applicable safe-harbor code that was met had the employee not taken up coverage

Unless the FPL safe harbor is utilized, affordability tests will have to be considered using payroll data Safe harbor tests may have different applicability or be unavailable for certain types of employees

Enrollment data (by day) and termination information (should coverage end on date of termination) must also be considered

Logic could be different in months for which the employer qualified for transition relieflikely a separate analysis

Part II requires information related to offers of coverage stipulated in IRS Section 6056 Employer Mandate

600115VOID

CORRECTEDForm 1095-CDepartment of the Treasury Internal Revenue Service

Employer-Provided Health Insurance Offer and Coverage Information about Form 1095-C and its separate instructions is at www.irs.gov/f1095c.

OMB No. 1545-2251

2014Part I Employee

1 Name of employee 2 Social security number (SSN)

3 Street address (including apartment no.)

4 City or town 5 State or province 6 Country and ZIP or foreign postal code

Applicable Large Employer Member (Employer) 7 Name of employer 8 Employer identification number (EIN)

9 Street address (including room or suite no.) 10 Contact telephone number

11 City or town 12 State or province 13 Country and ZIP or foreign postal code

Part II Employee Offer and CoverageAll 12 Months Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec

14 Offer of Coverage (enter required code)

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

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

Part III Covered Individuals If Employer provided self-insured coverage, check the box and enter the information for each covered individual.

(a) Name of covered individual(s) (b) SSN(c) DOB (If SSN is

not available)(d) Covered

all 12 months(e) Months of Coverage

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

17

18

19

20

21

22

For Privacy Act and Paperwork Reduction Act Notice, see separate instructions. Cat. No. 60705M Form 1095-C (2014)

Part III

Part III - Description Line(s) System(s) Complexities

Responsible and/or covered individual demographic info: Name, SSN or DOB

17 - 22 HRIS, TPA For each month, indicate whether individual was enrolled for at least one day in the month

Info will need to be reported for employees, non-employees (e.g., students, retirees, COBRA participants) and dependents

Part III requires information related to covered individuals stipulated in IRS Section 6055 - Individual Mandate

Ernst & Young LLP - helping you navigate the ACA reporting maze

Example: Employee is not full time under 4980H, and not enrolled in the employers medical plan for any month in the calendar year.

Reporting: Not required.

Reporting not required for every individual

Ernst & Young LLP will prepare a 1095-C employee statement for each individual for whom a statement is required.

Like W-2s, employers are required to report to the IRS.

Unlike W-2s, some employees will not receive a 1095-C depending on their individual situation.

Reporting is at the ALE member firm/FEIN level, not the controlled groupExample: Employee is full time and works for two applicable large employer (ALE) member firms. The employer in which the employee worked the most hours is treated as the employer for that month. That is, assume in one month employee works 100 hours for entity A and 60 hours for entity B, and the next month employee works 70 hours for entity A and 90 hours for entity B.

Reporting: Employee will be treated as an employee of Entity A in the first month and receive a 1095C from it for that month. For the second month, Employee will receive a 1095C from entity B covering that month. The employee will receive two 1095-C statements, one for each employer.

Ernst & Young LLP will accept and track multiple FEINs for a single employee and report accordingly.

Like W-2s, an employee may receive more than one 1095-C for a calendar year.

Unlike W-2s, the annually provided 1095-C reporting is broken out on a month-by-month basis.

Ernst & Young LLP will derive the applicable coding for Part II of the 1095C based elements and client configuration.

Like W2s, the IRS has provided specific codes.

Unlike W2s, multiple data points must be compared and assessed to determine the most appropriate code for the 1095C.

Example: The employee is in an initial measurement and associated administrative period JanuaryJuly, and is determined to be not full time under 4980H AugustDecember. The employee is under an offer of coverage based on the employers benefit plan eligibility beginning April 1.

Reporting: Code 1G will be reported on Line 14 (not full time for any calendar month but under an offer of coverage and enrolled for at least one calendar month), Line 15 will be blank, and Line 16 will be 2D for JanuaryMarch and 2C for AprilDecember.

Selecting the correct 1095-C Part II codes from multiple options

Reporting requirements under the ACA are far more complex than W-2 processing.

Example: Employee has a baby December 1, 2015, but waits until late January 2016 to enroll the baby, with coverage retroactive to December 1. The 1095-C was issued prior to the employee enrolling the baby.

Reporting: A corrected 1095-C may be issued for 2015, reflecting the babys enrollment in December 2015.

Reporting corrections

Ernst & Young LLP will be able to issue corrected 1095-Cs and 1094-Cs to reflect retroactive changes such as change in full-time status, coverage offers, enrollments and TIN corrections.

Like W-2s, corrected forms will be required.

Unlike W-2s, the employer may be limited in its ability to manage the volume, and corrections could occur for many months after the close of a calendar year.

Alternative reporting and transition analysis

Ernst & Young LLP can provide Advisory services related to alternate reporting and transitional relief:

Non-calendar year plans

98% offer method

Multiemployer plan interim relief

The Ernst & Young LLP advantage

Employees/ covered individuals

Allowing companies to focus on the business of their business

ACA COMPASSSM capabilities

Define eligible employees under the Employer Mandate

Determine ongoing employment status based on actual hours worked, by entity

Evaluate 4980H(a) excise penalty risk by entity (95% rule, 70% for 2015)

Identify location of all data elements required for employer reporting 6055 and 6056 reporting data by month by entity

Client ACA knowledge required: Low Client internal resources required: Low ACA excise tax risk: Low

IRS reporting

6055

6056

1094-C

1095-C

Ernst & Young LLP provides comprehensive end-to-end ACA services to help reduce the need for large-scale technology upgrades and commitment of internal resources.

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