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© 2016 Epstein Becker & Green, P.C. | All Rights Reserved. ebglaw.com
ACA Information Reporting
Getting Ready for 2017 Web...
© 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com
Presented by
Michelle Capezza
Member of the Firm, ...
© 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com
Agenda
4
2015 Survey
Summary &
Business Case
Pitfa...
© 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com 5
KEY TAKEAWAY #1
Key Takeaway #1 – 100% confidenc...
© 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com
Survey Summary
6
KEY TAKEAWAY #5
KEY TAKEAWAY #6
K...
© 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com
ACA Information Reporting
Monitoring Compliance wi...
© 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com
Why 2017 Matters
8
 How will the IRS know?
“Every...
© 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com
Penalty Payments under the Mandates
 The Individu...
© 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com
Current Penalties under IRC 6721
and IRC 6722 – Th...
© 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com
Why 2017 Matters
11
Based on the 2015 ACA
informat...
© 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com
Why 2017 Matters
12
Wrong Line 14 – Offer of Cover...
© 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com
Collecting Data
13
Social Security
Numbers of
empl...
© 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com
Collecting Data
14
 The data must be provided for...
© 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com
Assigning Correct Line 14 Codes
15
Slotting non-
b...
© 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com
Assigning Correct Line 16 Codes
16
Waivers New hir...
© 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com 17
 Initial solicitation if not collected at time...
© 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com
Why 2017 Matters
18
What are some of the
emerging ...
© 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com
Why 2017 Matters
19
Make sure disparate data has a...
© 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com
Assigning Correct Line 14 Codes
20
Internal
Contro...
© 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com
Assigning Correct Line 16 Codes
21
Internal contro...
© 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com
Names & Social Security Numbers
22
Populate W-2 in...
© 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com
Get Started Now
10 Questions You Should Ask Your T...
© 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com
 There are numerous ways to identify errors
 The...
© 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com 25
New Developments
New draft forms released for 2...
© 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com
Summary
26
2015 Survey
Summary &
Business Case
Pit...
© 2016 Epstein Becker & Green, P.C. | All Rights Reserved. ebglaw.com
Q&A from the
Audience
27
© 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com
Presented by
Michelle Capezza
Member of the Firm, ...
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ACA Information Reporting on Forms 1094 and 1095 B&C: Getting Ready for 2017 Webinar

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Join Michelle Capezza, Member of the Firm at Epstein Becker Green, and Howard M. Gerver, President of ACA Managed Services, for a conversation regarding best practices for ACA information reporting, addressing such topics as:

* Data collection and troubleshooting
* Addressing invalid names and social security numbers
* Determining whether an offer of qualifying coverage was made and assigning the correct code
* Employee Status Codes
* Misclassified workers
* Approaching corrections and penalties
* New Developments

With the first year of ACA information reporting completed, it is time to prepare for 2016 information reporting that will be filed in 2017. As the potential for IRS audits and penalties loom, explore some of the pitfalls and lessons learned from the recent inaugural process in order to streamline and improve your compliance with the requirements.

Webinar recorded on September 8, 2016.

http://www.ebglaw.com/events/aca-information-reporting-on-forms-1094-and-1095-bc-getting-ready-for-2017-webinar/

These materials have been provided for informational purposes only and are not intended and should not be construed to constitute legal advice. The content of these materials is copyrighted to Epstein Becker & Green, P.C. ATTORNEY ADVERTISING.

Published in: Healthcare
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ACA Information Reporting on Forms 1094 and 1095 B&C: Getting Ready for 2017 Webinar

  1. 1. © 2016 Epstein Becker & Green, P.C. | All Rights Reserved. ebglaw.com ACA Information Reporting Getting Ready for 2017 Webinar September 8, 2016
  2. 2. © 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com Presented by Michelle Capezza Member of the Firm, Epstein Becker Green mcapezza@ebglaw.com 212-351-4774 Howard D. Gerver President, ACA Managed Services howie@acamanagedservices.com 201-891-8010 3
  3. 3. © 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com Agenda 4 2015 Survey Summary & Business Case Pitfalls Important Team Questions New Legal & Operational Developments Q&A Best Practices
  4. 4. © 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com 5 KEY TAKEAWAY #1 Key Takeaway #1 – 100% confidence re: IRS reporting: Yes – 20% No – 40% Unsure – 40% KEY TAKEAWAY #2 KEY TAKEAWAY #3 Key Takeaway #2 – Areas requiring more confidence: Line 14 – 55% Line 16 – 45% Determining eligibility – 40% Key Takeaway #3 – If a penalty: Retain counsel – 50% Call broker – 40% Survey Summary KEY TAKEAWAY #4 Key takeaway - #4 – Completeness/integrity of source data: 75%
  5. 5. © 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com Survey Summary 6 KEY TAKEAWAY #5 KEY TAKEAWAY #6 Key Takeaway #5 – Most important vendor characteristics: Data Management – 80% Quality Assurance – 75% ACA Legal Expertise – 75% Data Security – 70% Key Takeaway #6 – Hire an outside firm to do QA 25%
  6. 6. © 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com ACA Information Reporting Monitoring Compliance with the Individual Mandate and Health Plan Enrollment  Form 1094-B, Transmittal of Health Coverage Information Returns  Form 1095-B, Health Coverage Monitoring Compliance of Applicable Large Employers with the Employer Mandate  Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns  Form 1095-C, Employer-Provided Health Insurance Offer and Coverage 7
  7. 7. © 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com Why 2017 Matters 8  How will the IRS know? “Every battle is won before it is fought.” - Sun Tzu
  8. 8. © 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com Penalty Payments under the Mandates  The Individual Mandate • $695 per uninsured adult in 2016 • Government agencies expect that about 3 million people will pay the penalty for any given month in 2016 • As of October 2015, roughly $2 billion in penalty payments had been collected from people who were uninsured during 2014  The Employer Mandate • Government projections include payments of employer mandate penalties of $228 billion over 2017-2026. • Increased costs for employers who pay penalties are projected to result in lower wages and reduction of other revenues by $50 billion (for a net of $178 billion) *Source: Congressional Budget Office Report: Federal Subsidies for Health Insurance Coverage for People Under Age 65: 2016 to 2026 (March 2016) 9
  9. 9. © 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com Current Penalties under IRC 6721 and IRC 6722 – The IRS Punch Line 10 Large Business with gross receipts of more than $5 million Time of filing Returns due on or after 1-1-6 (with inflationary adjustments) Not more than 30 days late $50 per return/$529,500 maximum After August 1 $260 per return/$3,178,500 maximum Intentional disregard $520 per return (with potential for increased penalties in case of intentional disregard) Small Business with gross receipts of $5 million or less Not more than 30 days late $50 per return/$185,000 maximum After August 1 $260 per return/$1,059,500 maximum Intentional Disregard $520 per return (with potential for increased penalties in case of intentional disregard) *Penalty rates depend on the tax year of return and are subject to change under IRC Section 6721(f). *Penalty waivers may apply if failure due to reasonable cause and not due to willful neglect.
  10. 10. © 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com Why 2017 Matters 11 Based on the 2015 ACA information reporting process, what are the common trouble areas and what can be done to better prepare for 2016 reporting?
  11. 11. © 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com Why 2017 Matters 12 Wrong Line 14 – Offer of Coverage codes Bad Data Wrong Line 16 – Employee Status/Safe Harbor codes Wrong Line 15 – Lowest Cost Premium Missing/Too Many Form Recipients Name/TIN Match Missing Controlled Groups 1 2 3 5 7 4 6 Missing/Wrong Dependents (SI)8 Other9 Common Pitfalls
  12. 12. © 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com Collecting Data 13 Social Security Numbers of employees, dependents and spouses (self- insured plans) Waivers Information for each plan (off-cycle plan years) Number of full time employees for each month Total number of employees and full time equivalents Employee only share of low cost premium Controlled group Other
  13. 13. © 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com Collecting Data 14  The data must be provided for each expected recipient and covered individual (if SI) in each controlled group  The data lives in the employer’s payroll, HR, and benefits system(s) as well as in your carrier’s enrollment system  The data must be mapped into the respective platform that is handling the IRS reporting  The data must have a common, unique employee identifier to link the data  Internal Controls should be developed to further mitigate risk (e.g., expected recipients, expected enrolled, expected code counts)  The data should be reviewed periodically to ensure that it is complete and credible
  14. 14. © 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com Assigning Correct Line 14 Codes 15 Slotting non- benefit eligible new hires into limited assessment periods Eligibility start month for non-benefit eligible employees Mid-month new hires Mid-month terminations Lowest monthly premium (1A vs. 1E) Unions Dependents (SI) Code conflicts with line 16
  15. 15. © 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com Assigning Correct Line 16 Codes 16 Waivers New hires Terminations Lowest monthly premium Unions Dependents (SI) Code conflicts with line 14
  16. 16. © 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com 17  Initial solicitation if not collected at time of hire  W-2, W-4 and I-9  Collect names changes based on life event(s)  Retain in employee files  If incorrect, need to attempt to collect annually  Backup withholding notice  If IRS sends notice… solicit via any modality  Solicitation by mail  3 attempts – open enrollment, again, by December 31st  Employers must show reasonable efforts and document  Cannot use notice as grounds for termination Names & Social Security Numbers
  17. 17. © 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com Why 2017 Matters 18 What are some of the emerging best practices based on these pitfalls?
  18. 18. © 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com Why 2017 Matters 19 Make sure disparate data has a unique employee ID to link data Review data early and often Objectively review last year’s forms data Conduct a gap assessment to collect & verify data voids, such as dependents and waivers Verify employee names and SSNs Perform a data diagnostic prior to mailing forms and filing with the IRS Take a “data test drive” 1 2 3 5 7 4 6 Document and retain proof to provide audit trail8 Maintain records of controlled group, plan documents and communications/reporting, eligibility methodology, affordability calculations 9 Other10
  19. 19. © 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com Assigning Correct Line 14 Codes 20 Internal Control Review Test Collect Check Internal controls • Expected offers vs. actual offers • Expected offer months vs. actual offer months Run test data Check for line 14 and line 16 code conflicts Collecting and verifying dependent data (SI) Periodic data review
  20. 20. © 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com Assigning Correct Line 16 Codes 21 Internal controls • Expected null vs. actual null • Expected enrolled months vs. actual enrolled months Internal Controls Review Periodic data review Check Check for line 14 and line 16 code conflicts Test Run test data
  21. 21. © 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com Names & Social Security Numbers 22 Populate W-2 information using W-4 information (Employee’s Withholding Allowance Certificate) Collect names changes based on life event(s) Compare W-2 data to W-2/W-4 data Retain changes in employee files to provide an audit trail
  22. 22. © 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com Get Started Now 10 Questions You Should Ask Your Team 23 2. How much time did it take to assemble the data? 4. How can we more accurately obtain correct SSNs? 6. Can we implement the Best Practices? 8. Do we have a way to perform a data diagnostic? 9. What internal control and QA measures do we have?
  23. 23. © 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com  There are numerous ways to identify errors  These errors must be fixed: • name, taxpayer identification number (TIN), employer EIN, line 14, 15 or 16 or Part III related to covered individuals  Corrections should be filed as soon as possible with the IRS and copy of the corrected return furnished to the individual  See Publication 5165 regarding electronic corrections using AIR  Develop an internal review process Corrections of Forms Form 1095-B, Form 1094-C, and Form 1095-C can be corrected 24
  24. 24. © 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com 25 New Developments New draft forms released for 2016 reporting • 1094-C transitional relief code has been removed • 1095-C-Line 14-two new codes for conditional offers to employee’s spouse • New COBRA codes • Filing deadlines-regular due dates Good faith standard no longer available; must meet standard of reasonable cause to waive penalties Proposed Regulations issued July 29, 2016 Marketplace Notices and IRS Penalty Notices Additional Considerations
  25. 25. © 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com Summary 26 2015 Survey Summary & Business Case Pitfalls Important Team Questions New Legal & Operational Developments Q&A Best Practices
  26. 26. © 2016 Epstein Becker & Green, P.C. | All Rights Reserved. ebglaw.com Q&A from the Audience 27
  27. 27. © 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com Presented by Michelle Capezza Member of the Firm, Epstein Becker Green mcapezza@ebglaw.com 212-351-4774 Howard D. Gerver President, ACA Managed Services howie@acamanagedservices.com 201-891-8010 28

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