Affordable Care Act Reporting and Filing. Agenda Review of the Affordable Care Act Individual vs. employer mandate Required IRS filings for employers.

Affordable Care ActReporting and Filing

Agenda

• Review of the Affordable Care Act• Individual vs. employer mandate• Required IRS filings for employers• How Paycor helps.

Review of the Affordable Care ActACA was designed to ensure that Americans have health insurance

• Individuals can obtain insurance two ways:1. Through the Marketplace (tax credits are available for

those who can’t afford it)

2. Through their employer if they work 30 hours or more weekly.

Review of the Affordable Care ActThe IRS needs accountability from employers that they are complying with the law• They want to know…

• Who has coverage• What kind of coverage they have• Where did they get it

The IRS wants to make sure employers who are supposed to be providing coverage are doing so—if not, they can be penalized.

Required IRS filings

• ACA added two new reporting and filing requirements related to health insurance coverage:• Section 6055 deals with

the individual mandate• Section 6056 deals with

the employer mandate.

Section 6055 & the Individual Mandate

•Beginning in 2014, PPACA requires all non-exempt individuals to either maintain minimum essential coverage (“MEC”) or pay a penalty as part of their income tax returns for every month they go without MEC

•Section 6055 reporting is necessary to determine whether individuals are maintaining MEC

•Returns must be filed with the IRS and statements furnished to covered individuals.

Section 6055: data required

Section 6056 & the Employer Mandate

•Requires applicable large employers to file returns with the IRS and provide statements to full-time employees about the health insurance coverage offered

•Information used to determine if the employer has complied with the Employer Shared Responsibility mandate and to determine if individual is eligible for premium assistance.

Applies to all Applicable Large Employers

Section 6056: data required

Required IRS filings overviewReporting Who Reports Transmittal Form Deadline Paycor

Filing?

6055 Small Employer with Self-Insured Plan

1094-B 1095-B 1/31 of each year (2/1/16)

No

6055 Small ER with Fully Insured Plan-Insurer

1094-B 1095-B 1/31 of each year (2/1/16)

No

6056 Large Employer with Fully Insured Plan

1094-C 1095-C 2/28 (or 3/31 if filed electronically*)

Yes

6055/6056 Large Employer with Self-Insured Plan

1094-C 1095-C 2/28 (or 3/31 if filed electronically*)

Yes

*Must file electronically if providing 250 or more “returns”

Penalties for not filing• Penalties range from $30-$100 per return

• Up to maximum of $1.5 million under Sections 6721 and 6722

• Special relief for 2015: no penalties will be imposed as long as the filing entity makes a good faith effort to comply

• However, you don’t want to invite the IRS into your business.

What information is required for

the 1095-C and 1094-C?

Form 1095-C: Part I

Information about both the employee and employer Static payroll/benefit admin

dataLines 7-13: Employer information

Comes from client.

Lines 1-6: Employee information including SSN

Line 10: Contact telephone number who the recipient may call about the information reported

Static payroll/benefit admin data

Form 1095-C: Part II

Client/benefit admin

Client/benefit admin

Client/benefit admin.

Line 15: Report the amount of the employee’s share of the lowest cost monthly premium for self-only coverage

Line 14: Offer of Coverage, for each month enter a “Series 1” code from the instructions

Line 16: Safe Harbor Codes, for each month enter a “Series 2” code from the instructions

Information required•All Applicable Large Employers (self-funded or fully-insured)• Line 14 Code Series 1 (Offer of coverage codes)

CODE DESCRIPTION HOW COMMON

1A MV offered at less than 9.5% of FPL ($93.18/mo) Common

1B Offer to EE only Rare

1C Offer to EE + Dependent (not spouse) Rare

1D Offer to EE + Spouse (non dependent) Rare

1E MV offered to EE, at least MEC offered to spouse & deps Common

1F MEC that is not MV offered to employee Some

1G Self-funded offered to part-time EE Rare

1H No offer of coverage Common

1I No offer to employee but employer using qualifying offer relief ?

Information required•All Applicable Large Employers (self-funded or fully-insured)

• Line 16 Code Series 2 (safe harbor codes)

CODE DESCRIPTION

2A Not employed any day that month

2B Part-time or termination month when not covered all month

2C Enrolled in coverage (Use over any other code if applicable)

2D EE in non-assessment period (e.g. waiting period)

2E Multi-employer plan interim relief

2F W-2 Safe harbor

2G FPL safe-harbor

2H Rate of pay safe harbor

2I Non-calendar year plan employer transition relief

Form 1095-C: Part III

•This section only applies to organizations with self-insured plans

Data comes from benefit admin.

Fully insured plan employers do not

complete Part III

Form 1094-C: Part I

Attach all 1095-C filings to this transmittal form:

Lines 1-6: Employer information

Lines 7-8: Contact information for individual responsible for addressing IRS questions about the formLines 9-16: Employer Information

Line 17: Reserved line for IRS use

Line 18: Total number of 1095-Cs submitted.

Comes from payroll/benefit admin

Comes from client

Comes from benefit admin

????

Derived number of 1095-Cs generated from system used for filing

Form 1094-C: Part II

Lines 19-21: For filings where there are related employers and where each is filing for their own group

Line 22: If an employer files under one of the four optional filing methods, the filer discloses which method they are using

Comes from client

Comes from client/benefit admin.

Line 22: Special Reporting RulesQualifying Offer•Employer offers MV coverage with employee cost less than 9.5% of FPL ($93.18 in 2015)•Benefits to employer:

• Enter code 1A in line 14 of 1095 and employer does not have to provide cost of lowest cost plan on line 15

• Can provide a simplified statement to employees instead of a copy of the 1095

•Problem with the simplified statement approach• Employer still has to provide a 1095 to the IRS…why not just

give the employees a copy• Self-funded employers cannot use the simplified statement for

anyone who has elected coverage.

Line 22: Special Reporting Rules98% Offer•Employer offers affordable MV coverage to 98% of full time employees•Benefits to employer:• Employer does not have to provide number of

full-time employees by month in column (b) of 1094.

Form 1094-C: Parts III and IV

Comes from insurer

Comes from payroll (Paycor’s ALE report)

Comes from payroll (Paycor’s ALE report)

Comes from benefit admin/client.

Comes from benefit admin/client

Comes from benefit admin/client

Column (a): Did employer offer coverage to 95% of full-time?Column (b): Number of full-time employees

Column (c): Total number of employees

Column (d): Is employer part of a controlled group?

Column (e): Transition relief code• Code A for 50-99 FTE relief• Code B for all other 100+ transition relief

Lines 36-65: Names and EINS of other ALE Members of the Aggregated ALE Group (if applicable)

What is Paycor doing to help?• Products that can help

• Benefits administration tool• Time and attendance tracking• Reporting & Analytics: ACA reporting to help you

determine ALE status, employee eligibility and plan affordability

• Filing assistance for 1095-C and 1094-C• We will aggregate information from our systems• Clients that are not using Paycor’s benefit

administration or time and attendance system can import or enter information through a client portal for an additional fee

• We will file the 1094-C and 1095-C forms on the client’s behalf.

PricingPrice:

•Chargeable service with additional fees for aggregating the data in our portal and for filing the 1094-C and 1095-C with the IRS.

Summary: Next Steps

1. Learn the fundamentals- Review the returns and instructions

2. Determine which reporting requirements and forms apply to your organization

3. Determine what information you are required to collect and where you’re going to get it, and start collecting it on a monthly basis

4. Develop a game plan to get information into the system and to handle the filing

5. Communicate with employees.