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PPACA Employer Reporting Requirements CE Presentation - Client Presentation
1. An Overview of the New PPACA
Employer Reporting Requirements
By Trey Tompkins, JD, MBA
President, Admin America, Inc.
July 8, 2015
2. About Your Presenter: Trey Tompkins
• President of Admin America, Inc.
• Independent TPA based in Alpharetta, Georgia
• Specializing in FSA, HRA, HSA and COBRA Administration
• Also consults on PPACA, ERISA and HIPAA compliance
• Over 18 Years Employee Benefits Consulting Experience
• Member of NAHU’s Region V Leadership Team
• Former President of NAHU’s Atlanta and Georgia Chapters
• Former Member of NAHU’s National Legislative Council
• Member of the State Bar of Georgia
• Graduate of Vanderbilt University, the University of Georgia School of
Law and Georgia State University College of Business
• President of the Rotary Club of Milton-Windward
3. Employer Reporting Core Concepts
• Who
• Employers subject to the ACA’s Employer Mandate
• Employers who sponsor self-funded group health plans
• What
• Annual filings with the IRS
• Annual distribution of required forms to employees
• When
• Beginning in 2016 (for 2015)
• Why
• Enforcement of the ACA’s Individual and Employer Mandates
• How
• To employees on paper via mail or electronically with advance consent
• To IRS on paper or electronically
• Hot off the presses:
• Increased non-compliance penalties included within the Trade Preferences
Extension Act of 2015 – Signed by President Obama on June 29, 2015
• New IRS guidance on Electronic Filing Requirements issued June 26, 2015
4. Employer Reporting: Who
• Employer’s Subject to the ACA’s Employer Mandate
• Generally Employers with 50 or more Full-Time Equivalent (FTE)
Employees during the prior year (2014) for six or more months
• Special rules apply to new employers
• Control group rules apply so employers must know who their owners
are and what other employers their owners own
• Transitional relief from the Employer Mandate in 2015 for employers
with 50-99 FTE employees is irrelevant
• Employer’s Who Sponsor Self-Funded Group Health Plans
• Partially self-funded plans count as self-funded for this purpose
• Only major medical coverage triggers the requirement
5. Employer Reporting: What -
The Forms
• Form 1094-B Transmittal of Health Coverage Information Returns
• Form 1095-B Health Coverage
• Form 1094-C Transmittal of Employer-Provided Health Insurance Offer
and Coverage Information Returns
• Form 1095-C Employer-Provided Health Insurance Offer and Coverage
• Information included in the returns includes:
• Identification of employees (and dependents) who were eligible for
employer sponsored coverage
• Months of the year when eligible individuals were enrolled in
coverage
6. Employer Reporting: How
• Deliver to Covered Individuals / Employees
• By January 31 (or the first business day if on a non-business day)
• On Paper via mail or electronically with consent
• Consent must be affirmative and in advance
• Consent must be made or confirmed electronically
• File with the IRS
• By February 28 if on paper and by March 31 if electronically
• Or on the first business day if on a non-business day
• Must file electronically if more than 250 information returns
• Electronic filing performed through IRS’s federal E-file system
7. Employer Reporting Requirements for
Various Employer and Coverage Types
Plan Type / Employer Size Non-ALE Members ALE Members
Fully Insured No Employer Reporting 1 1094-C and 1095-C
Self Insured 1094-B and 1095-B 1094-C and 1095-C2
No Coverage No Employer Reporting 1094-C and 1095-C 3
Footnotes
1. Insurance Carrier Files Forms 1094-B and 1095-B
2. Self-Insured ALE Members are permitted to use a single
combined form for Sections 6055 and 6056 reporting
3. Only if the ALE has at least one Full-Time Employee
8. Employer Reporting: When
• Mandatory compliance begins with reporting in 2016
• Reporting 2015 information
• IRS “encouraged” voluntary compliance in 2015
• Forms must be filed with the IRS by the end of March
• If filed on paper, the forms must be filed by the end of February
• Paper filing is not available if employer must file 250 or more forms
• Forms must be delivered to individuals by the end of January
• Delivery includes placing in the U.S. Mail
• All deadlines are subject to one day extensions for weekends
9. Employer Reporting: Why
• To help the government enforce the ACA’s Individual and Employer
Mandates
• To provide employees with information they need to complete their
personal income tax returns
• To avoid non-compliance penalties
• Identical for the penalties for failing to provide W2s
• For 2016 filings, no penalties for “good faith” compliance efforts
• Penalty relief not available for late filings
• Beginning with 2017 submissions, penalties apply for mistakes
10. Employer Reporting
Non-Compliance Penalties
(As modified by the Trade Preferences Extension Act of 2015 (June 2015))
Type of Failure Per Form Penalty
Annual Maximums
Large Business /
Small Business
Filed less than 30 days late $50 $500,000 / $175,000
Filed before August 1 $100 $1,500,000 / $500,000
Filed August 1 or later $250 $3,000,000 / $1,000,000
Intentional Disregard $500 No Cap
Small Businesses are those with less than $5 Million in gross
receipts during each of the previous three years
11. Form 1094-B Overview
• Form Name: Transmittal of Health Coverage Information Returns
• Purpose: Enforcement of the Individual Mandate
• Who Files:Insurance Company (fully insured plans) or self-funded
plan sponsors
• How Many: 1 per insurer or self-insured plan
• How: Paper or Electronically
Note: Entities filing at least 250 returns under Sections
6055 or 6056 are required to file electronically
• When: Due the last day of February (February 29, 2016)
or the last day of March if filed electronically
13. Form 1094-B Line x Line Review
Line 1: Filer’s Name – Insurance Company or Plan Sponsor
Line 3: Name of Person to Contact – Who can answer the IRS’s questions
Line 9: Total Number of Forms 1095-B Submitted With This Transmittal
14. Form 1095-B Overview
• Form Name: Health Coverage
• Purpose: Enforcement of the Individual Mandate
• Who Files:Insurance Company (fully insured plans) or self-funded
plan sponsors
• How Many: 1 each to the IRS and to the covered individual per
employee/individual covered any time during the year
• How: Paper or Electronically
Note: Entities filing at least 250 returns under Sections
6055 or 6056 are required to file electronically
• When: With the IRS on or before the last day of February
(February 29, 2016) or the last day of March if filed
electronically and
To the covered individual on or before the last day of January
(February 1, 2016 because January 31 is a Sunday)
16. Form 1095-B Line x Line Review
Line 1: Name of Responsible Individual – the policy holder or the primary
insured individual for a group plan (not the employer)
Line 8: Enter Letter Indentifying Origin of the Policy
Code List: A. Small Business Health Options Program (SHOP)
B. Employer-Sponsored Coverage
C. Government-sponsored program
D. Individual market insurance
E. Multiemployer plan
F. Miscellaneous minimum essential coverage
Line 9: Small Business Health Options Program (SHOP) Marketplace
Identifier, if applicable – current instructions are to leave blank
Line 16: Name – The insurance carrier, the self-funded plan sponsor or the
government agency
17. Form 1095-B Line x Line Review
(Continued)
Part IV – Covered Individuals (Enter the information for each…)
Column (a): Name of Covered Individuals
Column (b): SSN – groups may not have this for all dependents (birthdays
are okay if SSN is not available – don’t enter both)
Column (d): Covered all 12 months – or list the individual months coverage
was in effect
18. Form 1094-C Overview
• Form Name: Transmittal of Employer-Provided Health Insurance Offer
and Coverage Information Returns
• Purpose: Enforcement of the Employer Mandate
• Who Files:Members of Applicable Large Employers (ALEs) with at least
one full-time employee
• How Many: 1 to the IRS per ALE member
• How: Paper or Electronically
Note: Entities filing at least 250 returns under Sections
6055 or 6056 are required to file electronically
• When: Due the last day of February (February 29, 2016) or
the last day of March if filed electronically
Note: Medium sized ALEs must still file in 2016
20. Form 1094-C Page 1 Line x Line Review
Line 1: Name of ALE Member (Employer) – Employer’s name
Line 9: Name of the Designated Government Entity (only if applicable) –
only if a DGE is filing on behalf of a government employer
Line 18: Total number of Forms 1095-C submitted with this transmittal
Line 19: Is this the authoritative transmittal for this ALE Member?
• If yes, complete the remainder of the Form
• If no, sign the bottom of this page and don’t complete anything else.
Line 21: Is ALE Member a Member of an Aggregated ALE Group – Client
needs to know their status as a member of a Control Group for tax
purposes
21. Form 1094-C Page 1 Line x Line Review
Line 22: Certifications of Eligibility (select all that apply) :
A. Qualifying Offer Method:
• Qualifying offers were made to at least one full-time employee for
all months that the Employer Mandate would apply
• For fully insured plans, allows for possibility of generic reporting to
employees offered coverage all year in lieu of distributing Form
1095-C to them
• Still must file Form 1095-C for those employees with the IRS
B. Qualifying Offer Method Transition Relief:
• Qualifying offers made for one or more months to at least 95% of
full-time employees
• For fully insured plans, allows for possibility of generic reporting to
all full-time employees in lieu of distributing Form 1095-C
• Still must file Form 1095-C for those employees with the IRS
22. Form 1094-C Page 1 Line x Line Review
Line 22: Certifications of Eligibility (select all that apply) : (Continued)
C. Section 4980H Transition Relief (for 2015)
• Relief for ALEs with Fewer than 100 full-time employees
• No employer mandate penalty in 2015
• No employer mandate penalty for off-calendar year plans for
the months of the 2015 Plan Year that fall in 2016
• Not available to ALEs who reduced workforce size or benefit
offerings after 02/09/14 to avail themselves of this rule
• Relief for ALEs with 100 or more full-time employees
• “Sledgehammer penalty” does not apply to first 80 full-time
employees (instead of the standard 30 full-time employees)
• Additional reduction applies for 2015 and for any months of a
2015 Plan Year that fall in 2016 (for off-calendar year plans)
23. Form 1094-C Page 1 Line x Line Review
Line 22: Certifications of Eligibility (select all that apply) : (Continued)
D. 98% Offer Method
• Employer offered Affordable, MV coverage to 98% of full-time
employees for all 12 months (and offered MEC coverage to their
dependents)
• Employer does not have to complete “Full-Time Employee Count”
in Part III, column (b).
Signature Line:
25. Form 1094-C Page 2 Line x Line Review
Part III – ALE Member Information - Monthly
Column (a): Minimum Essential Coverage Offer Indicator
• Generally based on whether coverage was offered to 95% of full-time
employees and their dependents
• Don’t count full-time employees in a waiting period
• For 2015, there is Transition Relief for lesser offerings
• ALEs with 70% coverage offering can check “Yes”
• ALEs who did not historically offer coverage to dependents can
check “Yes” if they take steps in 2015 to extend coverage to
dependents in 2015
• For non-calendar year plans that did not alter their plan years after
12/27/2012:
• ALEs who were not eligible under the Plan terms until the first
day of the Plan Year beginning in 2015 can be treated as having
been offered coverage
26. Form 1094-C Page 2 Line x Line Review
Part III – ALE Member Information – Monthly (Continued)
Column (b): Full-Time Employee Count for ALE Member
• Employees working 130 hours in the month
• May be skipped if 98% Offer Method was selected
Column (c): Total Employee Count for ALE Member – FT and PT Employees
• Based on a monthly snapshot
• Measured on the same day of each month (elected by employer)
• First day
• Last day
• First day of first pay period
• Last day of first pay period
27. Form 1094-C Page 2 Line x Line Review
Part III – ALE Member Information – Monthly (Continued)
Column (d): Aggregated Group Indicator
Column (e): Section 4980H Transition Relief Indicator –
“A” - 50-99 Transition Relief (ALEs with fewer than 100 full-time
employees)
“B” - 100 or more Transition Relief (ALEs with 100 or more full-time
employees)
29. Form 1094-C Page 3 Line x Line Review
• List Names and EINs for other ALE Members of the Aggregated ALE
Group who were members at any time during the calendar year
• Do not attach additional sheets if there are more than 30
• List the first 30 members in descending order based on the highest
average monthly number of full-time employees
30. Form 1095-C Overview
• Form Name: Employer-Provided Health Insurance Offer and Coverage
• Purpose: Enforcement of the Employer Mandate
• Who Files:Members of Applicable Large Employers (ALEs) with at
least one full-time employee
• How Many: 1 each to the IRS and to the Employee per full-time
employee eligible for MEC coverage any time during the
year
• How: Paper or Electronically
Note: Entities filing at least 250 returns under Sections
6055 or 6056 are required to file electronically
• When: With the IRS on or before the last day of February
(February 29, 2016) or the last day of March if filed
electronically and
To the covered individual on or before the last day of January
(February 1, 2016 because January 31 is a Sunday)
33. Form 1095-C Line x Line Review
Part II – Employee Offer and Coverage – If the answers to the below
questions are the same for all 12 months of the calendar year, only one
entry is required. Otherwise, each line must be answered separately for
each month
Line 14: Offer of Coverage (enter required code)
Code List: 1A – MEC, MV, Affordable, Family Eligibility
1B – MEC, MV, Employee Only
1C – MEC, MV for Employee; MEC for Dependents
1D – MEC, MV for Employee; MEC for Spouse
1E – MEC and MV for Employee; MEC for Spouse and Deps.
1F – MEC only
1G – Part-Time Employee Coverage
1H – No offer of coverage
1I – Qualified Offer Transition Relief 2015 – Incomplete
offer of coverage
34. Part II – Employee Offer and Coverage (Continued)
New in June 2015! - Plan Start Month – 2 digit month code
Line 15: Employee Share of Lowest Cost Monthly Premium, for Self-Only
Minimum Value Coverage –
Line 16: Applicable Section 4980H Safe Harbor (enter code, if applicable)
Code List: 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
Coming for 2016 - new codes for conditional offers of coverage to spouses
Form 1095-C Line x Line Review (Continued)
35. Form 1095-C Line x Line Review
(Continued)
Part III Covered Individuals – Only for Self-Insured Coverage (Fully-Insured
coverages have this information reported by the carrier in Form 1094-C)
Column (a): Name of Covered Individuals
Column (b): SSN – groups may not have this for all dependents (birthdays
are okay if SSN is not available)
Column (d): Covered all 12 months – or list the individual months coverage
was in effect
36. New Electronic Reporting Guidance
(Issued June 26, 2015 by the IRS)
Steps Required To Utilize the ACA Information Return (AIR) System
1. Register with the IRS’s e-services website including submission of personal
information about the person registering on behalf of the entity
2. Obtain an AIR Transmitter Control Code (TCC), a unique identifier
authorizing each Submitting Entity to submit the reporting forms
3. Pass a series of technical/system tests to ensure that Reporting Forms will
be properly submitted when due.
The first two steps can be completed now while the third step will be available
for completion later in 2015.
37. Employer Reporting – Next Steps
1. Determine your company’s filing requirements for 2015 now
2. Identify required data collection needed to complete required forms
3. Address any shortfall in current data collection immediately
4. Implement necessary data retention process
5. Identify possible Form preparation providers or resources: payroll
company, CPA, software product.
6. Complete the first two steps of the IRS’s AIR system registration process
and schedule completion of the third step for Fall 2015.
7. Schedule preparation, employee distribution and filing of returns with the
IRS for early 2016 as appropriate.
