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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) [email protected]
Shirazi Benefits8205 W. 20th St. | Greeley, CO 80634http://www.shirazibenefits.com
Supplemental material supplemented from: Presidio Benefits