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What Every SAP HCM Team Needs to Know About ACA Reporting Guidelines
Kelly Puckett May 13, 2015
© Copyright 2015 – SpinifexIT Pty Ltd.
Today’s Agenda
1. What we know 2. ReporAng Requirements 3. Brief ExplanaAon of forms 4. Annual ReporAng Deadlines 5. How SpinifexIT Can Help 6. Helpful Resources & Links 7. QuesAons
GLOBAL OFFICE LOCATIONS: Melbourne, Atlanta, London, CharloVe and Manila MISSION: To empower SAP HR and Payroll users by offering soXware and services that:
• Improve strategic decision making • Enhance reporAng and analysis • Eliminate manual processes • Reduce payroll support efforts • Protect data integrity • Simplify payroll and tax reconciliaAon
About SpinifexIT
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Legal Disclaimer
This presentaAon is not: • Legal Advice • The final word on Healthcare Reform
SpinifexIT does not pracAce law or give legal advise.
SpinifexIT strongly recommends that clients obtain qualified legal counsel and tax advise prior to making any decisions
and/or compleAng the forms
What is ACA?
• The Affordable Care Act, also known as the Pa;ent Protec;on and
Affordable Care Act (PPACA), and informally as Obamacare, was signed into law by President Barack Obama on 23rd March, 2010.
• All employers are impacted by ACA, but the requirements depend on the number of employees or the number of W-‐2s in any given year.
• Under ACA, employers with 50 or more full-‐Ame equivalent employees (FTE) are required to offer health benefits to employees averaging at least 30 hours of work per week. If the employer does not offer health benefits, they are required to pay an annual penalty.
Who is Responsible for Reporting?
• All employers that meet the definiAon of an Applicable Large Employer (ALE) or ALE member
• Applicable Large Employers (ALE) – Employers with an average of 50 or more full-‐Ame employees plus
full-‐Ame equivalents for the calendar year prior to the reporAng year. – Employees who work an average of 30+ hours a week are considered
Full-‐Time or Full-‐Time Equivalent – “Look Back Period” is used to determine if a company is large (ALE) or
small employer by using a period in Ame, determined by the employer.
What We Know
• The ACA created two new secAons in the Tax Code, secAon 6055 and 6056. – Code § 6056 requires applicable large employers (ALEs) to file annual
reports detailing the health coverage they offer to full-‐Ame employees.
– Code § 6055 requires health insurers, and employers that provide minimum essenAal coverage (MEC) through a self-‐funded health plan, to provide an annual statement to covered persons.
• In general, the ACA health plan reporAng process will work much the same as current W-‐2 and 1099 reporAng.
What We Know: Forms
All ALE’s will be required to file the following – 1095-‐B – Employee Statement – fully insured employers – 1095-‐C – Employee Statement – self funded employers – 1094-‐C – Employer form
An employer is required to provide Full-‐Time employees, COBRA ParAcipants and ReArees with form 1095.
1095-C – Employer-Provided Health Insurance Offer and Coverage
1095-C – Employer-Provided Health Insurance Offer and Coverage – Part I
Part I – IndicaAve data -‐ Basic employee and employer informaAon
1095-C – Employer-Provided Health Insurance Offer and Coverage – Part II
Part II – Report offers of coverage, employee contribuAon requirements, and employer safe harbors for each employee and each month of the calendar year. • Line 14 -‐ Offer Codes -‐ Employers will use codes to idenAfy the type of
coverage offered to an employee for each month of the calendar year.
1095-C – Employer-Provided Health Insurance Offer and Coverage – Part II
• Line 15 -‐ Employee Share of Lowest Cost Monthly Premium – Employers must report the amount of the employer contribuAon required to
parAcipate in the lowest cost plan that provides minimum value for each month in the calendar year.
1095-C – Employer-Provided Health Insurance Offer and Coverage – Part II
• Line 16 -‐ Employer Safe Harbor Codes – Employer will use codes to idenAfy whether one of the employer contribuAon safe harbors applies to each employee for each month of the calendar year.
1095-C – Employer-Provided Health Insurance Offer and Coverage - Part III
Part III – Used to provide monthly details on employees, spouses and dependents covered by the plan during the calendar year. Data includes name, SSN (or DOB if SSN is not available), and an indicaAon of which calendar months the individual was covered by the plan.
1094-C - Transmittal of Employer-Provided Health Insurance Offer and Coverage
– In addiAon to providing employees with a Form 1095, employers must file a Form 1094 o Most employers will use the 1094-‐C, which provides employer plan and offer of
coverage informaAon. – File electronically (>250 Form 1095-‐C) by March 31, 2016 – File paper (<250 Forms 1095-‐C) by February 29, 2016
1094-C: Transmittal of Employer Provided Health Insurance Offer and Coverage Information Returns
1094-C: Transmittal of Employer Provided Health Insurance Offer and Coverage Information Returns
Part I • IndicaAve data -‐ Basic employer informaAon. • Line 18 – Total Number of Form 1095-‐C submiVed with this transmiVal
1094-C: Transmittal of Employer Provided Health Insurance Offer and Coverage Information Returns
Part II – Additional information on the employer
1094-C: Transmittal of Employer Provided Health Insurance Offer and Coverage Information Returns
Part III – Report aggregate employer information for each month of the calendar year
1094-C: Transmittal of Employer Provided Health Insurance Offer and Coverage Information Returns
Annual Reporting Deadlines
• Employer reporAng is required in the 1st quarter of 2016 for 2015. – ReporAng will be on a calendar year basis regardless of the employer’s
plan year. • 1094 Annual employer returns must be filed by the last day of
February (March 31, if filed electronically). – Employer returns are due for the first Ame by February 29, 2016
• 1095 Employer-‐Provided Health Insurance Offer & Coverage form must be provided annually by January 31. – The first employee statements must be provided by Feb. 1, 2016
(January 31, 2016 is a Sunday).
What We Know: Changes to SAP
• Major changes are expected from SAP scheduled to be released in August 2015 (see SAP Note 2060131)
• The planned delivery for change includes a new report with ALV output, PDF interface, and PDF form templates that will provide customers with the flexibility to implement forms based on their reporAng requirements.
What SpinifexIT Can Do?
• SpinifexIT conAnues to acAvely invesAgate SAP developments • As we learn more we will keep you informed of how SpinifexIT soluAons will help fulfill the ACA requirements.
SpinifexIT can currently assist with things such as: • ReporAng on Master Data, Payroll Results and Hours Worked • IdenAfy Enrollment of employees and covered dependents • Calculate the average 30 hours worked • CreaAon of Interface files • Document CreaAon • Data ValidaAon
Resources
• SAP Note • 2060131 -‐ Announcement Note for InformaAon ReporAng for Employer Sponsored
Coverage and Minimum EssenAal Coverage
• Website • hVp://bradenbenefits.com/healthcare-‐financing-‐aca/look-‐back-‐period/ • hVp://benefitcomply.com/issue-‐brief-‐irs-‐releases-‐aca-‐employer-‐reporAng-‐instrucAons • hVp://www.granVhornton.com/~/media/content-‐page-‐files/tax/pdfs/RSS-‐tax/2015/
THT-‐2015-‐04.pdf?utm_source=Mondaq&utm_medium=syndicaAon&utm_campaign=View-‐Original
• hVp://obamacarefacts.com/form-‐1095a-‐1095b-‐1095c/ • hVp://www.irs.gov/ • hVp://www.shrm.org/hrdisciplines/benefits/arAcles/pages/cobra-‐exchange-‐noAces.aspx
• Summary of Forms 1094 & 1095
• 1095 Part II, Line 14 & 16 Codes
Summary of Forms
Forms Distribute form to?
Annual Repor;ng Deadlines 2016 Repor;ng Deadline
Sec;ons to Complete
Form 1095 Employer-‐Provided Health Insurance Offer and Coverage
Employee & IRS
Provided annually to full-‐Ame employees by January 31. These are the same deadlines that apply to employer W-‐2 reporAng.
Provide to IRS with 1094, Last day of February (March 31, if file electronically)
The first employee statements must be provided by Feb. 1, 2016 (January 31, 2016 is a Sunday).
Self-‐Funded Employers – Parts I, II and III Fully-‐Insured Employers –Complete Parts I and II, but are not required to complete Part III. The carrier providing coverage will report to the IRS and issue a statement to covered individuals. Employers who sponsor both fully-‐insured and self-‐funded plans are required to fill out Part III only for individuals who enroll in a self-‐funded plan.
Form 1094 TransmiUal of Employer-‐Provided Health Insurance Offer and Coverage
IRS Last day of February (March 31, if filed electronically).
Employer returns to the IRS are due for the first Ame by February 29, 2016
Part I, II and III
1095-C Codes: Part II Line 14 - Offer of Coverage
• 1A -‐ Qualified Offer Minimum EssenAal Coverage providing Minimum Value offered to full-‐Ame employee with employee contribuAon for self-‐only coverage equal to or less than 9.5% mainland single federal poverty line and Minimum EssenAal Coverage offered to spouse and dependents(s).
• 1B – Minimum EssenAal Coverage providing Minimum Value Offered to employee only. • 1C – Minimum EssenAal Coverage providing Minimum Value offered to employee and at least
Minimum EssenAal Coverage offered to dependents(s) (not spouse) • 1D – Minimum EssenAal Coverage providing Minimum Value offered to employee and at least
Minimum EssenAal Coverage offered to spouse (not dependents) • 1E -‐ Minimum EssenAal Coverage providing Minimum Value offered to employee and at least
Minimum EssenAal Coverage offered to dependent(s) and spouse • 1F -‐ Minimum EssenAal Coverage not providing Minimum Value offered to employee, or employee
and spouse or dependent(s), or employee, spouse and dependent(s) • 1G – Offer of coverage to employee who was not a full-‐Ame 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 not providing Minimum EssenAal Coverage)
• 1I – Qualified Offer TransiAon Relief 2015: Employee (and spouse or dependents) received no offer of coverage, or received an offer of coverage that is not a Qualified Offer, or received a Qualified Offer for less than all 12 months.
1095-C Codes: Part II Line 16 – Safe Harbor
• 2A – Employee not employed during the month • 2B – Employee not a full-‐Ame employee • 2C – Employee enrolled in coverage offered • 2D – Employee in a secAon 4980H(b) limited non assessment period • 2E – MulAemployer interim rule relief • 2F – SecAon 4980H affordability Form W-‐2 safe harbor
• Note: Certain codes on lines 14 and 16 may apply simultaneously, and certain codes on these lines may be inconsistent with other codes. The IRS instrucAons idenAfy which codes to use when more than one can apply and which may not be used along with certain other codes.
Summary
• An ALE’s has an average of 50 or more full-‐Ame employees plus full-‐Ame equivalents
• ReporAng on employees who work an average of 30+ hours a week • Provide Full-‐Time employees, COBRA ParAcipants and ReArees with 1095
form by February 1, 2016 • Filing of the 1094
– File electronically (>250 Form 1095-‐C) by March 31, 2016 – File paper (<250 Forms 1095-‐C) by February 29, 2016
• SAP note scheduled to be released in August 2015 • SpinifexIT can assist with:
• CalculaAng the average 30 hours worked • IdenAfy enrollment of employees and covered dependents
? QUESTIONS/ANSWERS
THANK YOU!
Kelly PuckeU [email protected]
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