Healthcare Reform Update: 6056 Reporting Forms

Healthcare Reform Update:
6056 Reporting
OCTOBER, 2015

ARTHUR J. GALLAGHER & CO. | BUSINESS WITHOUT BARRIERS™
Today’s Agenda
• Overview of Requirements
• Form 1094-C
• Form 1095-C
• Refresher: Full Time Employee
• Examples
• Next Steps
• Gallagher Resources
Caveat:
The information in this presentation is
based on our understanding at this time
and is intended as a general overview.
This is a new and developing
requirement. It is highly recommended
that you consult the instructions, IRS
website, and other current sources for
information when actually completing
these forms.
© 2015 GALLAGHER BENEFIT SERVICES, INC. 1

Why Do You Care?
• Reporting used to enforce PPACA Penalties
• Sledgehammer Penalty - 4980H(a)
– $167/month for all employees less 30 (80 for 2015)
• Tack hammer Penalty – 4980H(b)
– $250/month for each employee who receives a tax subsidy
on the public exchange
• At least 100 EEs: effective 2015
• 50-100 EEs: effective 2016
• Proper documentation is your shield
• $100/return penalty failure to file

Reporting Overview
6055 Reporting 6056 Reporting
Purpose INDIVIDUAL mandate EMPLOYER mandate &
INDIVIDUAL tax credit
IRS Cover Sheet 1094-B* 1094-C
Individual Statement** 1095-B*
Enrolled at least 1 day
1095-C
Full time at least 1 month
Responsible Party Carrier Employer
Deadline (Employee) January 31 January 31
Deadline (IRS) February 28
(Electronic: March 31)
February 28
(Electronic: March 31)
** Each Statement also provided to IRS with Cover Sheet
Focus on 1094-C & 1095-C

Key: Documentation
• Right answer not enough: have to show your work
• Must be able to document BY MONTH:
– Which employees are full time (Monthly or lookback)?
– Which employees/dependents are offered coverage?
– Which employees/dependents accepted coverage?
– Which coverages are Minimum Essential Coverage?
– Which coverages are Minimum Value?
– Which coverages are Affordable?

6056 Reporting
• Employer completes this reporting
• For purposes of satisfying EMPLOYER mandate
• Also: INDIVIDUAL tax credit eligibility
• Indicates MEC, MV and Affordability offer and
acceptance on a month-by-month basis
• Paper distribution required unless EE elects to receive
electronically (same rules as W-2)
• Electronic filing required if 250 EEs

Form 1094-C
• IRS Cover Sheet
• Part I: Basic Contact Information
– Identify Designated Governmental Reporting Entity
• Part II: Other Information
– Identify if Authoritative Transmittal
– Controlled Group?
– Indicate simplified reporting if any
• Part III: MEC and EE Counts monthly
• Part IV: Other controlled group members

Form 1094-C Page 1
Part III Column (b) Blank
1095-C
Line 14
Code 1A
At least 1
Employee
1095-C Line 14 Code 1A
or 1I At least 1 Employee
Part III Column (e)
Part III
Column
(d) & Part
IV

Form 1094-C Page 2
70%
for
2015
Sledgehammer Penalty Shield
Does Not Tie
to Anything?
Blank if Check
Line 22 Box D
Does Not
Tie to
Anything?
Include ALL
Employees
Blank Unless
Line 21 is Yes
Blank Unless
Line 22 Box C
50-99: Code
A (No Penalty
2015)
100+: Code B
(Reduce
Sledgeham-
mer by 80
rather than 30
for 2015)

Form 1094-C Page 3
Blank Unless Line 21 is Yes

Section 4980H Transition Relief
• Form 1094-C Line 22: Check Box C if any of the
following apply:
1. 50-99 EEs & FTEs exempt 2015 penalties (and into 2016 for
non-calendar year plans) – See instructions page 15
2. 100+ EEs & FTEs reduce penalty count by 80 rather than 30
3. Lower Sledgehammer exemption from 95% to 70%
4. Ignore lack of offer to dependents during 2015
5. Non-calendar plan year 12/27/2012: extend 2014 relief into
2015 and 2016 – see instructions page 16
6. First pay period January, 2015 relief – see instructions page 16
• Items 1 or 2 and 3 will be common

Form 1095-C
(Individual Statement)

Form 1095-C
• Part I: Employee and Employer information
• Part II: MEC, MV & Affordability month by month
– ANY employee who was full time during ANY month
– Complex series of codes
• Part III: Covered Individuals month by month
– Only complete if self-funded plan with no over-lapping fully
insured coverage
– ANY employee with coverage (whether or not full time)
– Used instead of 1095-B for INDIVIDUAL Mandate
– Spouses, children, etc.

Form 1095-C
1094-C Line 22 Box A:
1A for at least 1 EE
Blank Unless Self-Funded
1094-C Line 22 Box B:
1A or 1I for at least 1 EE
Blank if Line 14 is 1A, 1F, 1G, 1H or 1I
May Be Blank. 2D Override 2B. 2E Override 2D, 2F, 2G, 2H. 2C Override All

Refresher: Full Time
Employees

Reporting vs. Eligibility
• Final Regulations ONLY specify Full Time status for
reporting purposes
• There is no legal REQUIREMENT that all employees
who are considered full time for reporting purposes must
be offered coverage
• It may be cheaper to pay the tackhammer penalty on some
employees than to open up eligibility to all employees
considered full time for reporting purposes
• Cost/Benefit analysis may be appropriate
• Key: develop strategy for protecting against
sledgehammer penalty

Who is Full Time?
Method Pro Con
Monthly Method 1. Simpler to Determine
2. Status not locked in for
months at a time
1. Don’t know status until
too late to offer coverage
2. Could result in moving in
and out of FT status
during year
Lookback Method 1. FT status stable and
known ahead of time
2. Able to offer coverage
proactively
1. Complex determination
rules
2. Status locked in for
entire Stability Period
May use different methods/periods for certain groups of employees:
• Union vs Non-Union
• Different CBAs
• Locations in different states
• Salaried vs Hourly

Look-Back Method
New Variable Hour EE
19
Initial Stability PeriodInitial Measurement
Period
Administrative
Administrative
N
O
V
D
E
C
J
A
N
F
E
B
M
A
R
A
P
R
M
A
Y
J
U
N
J
U
L
A
U
G
S
E
P
O
C
T
N
O
V
D
E
C
J
A
N
F
E
B
M
A
R
A
P
R
M
A
Y
J
U
N
J
U
L
A
U
G
S
E
P
O
C
T
N
O
V
D
E
C
2012 2013 2014
Standard Measurement
Period
Standard Stability
Period
J
A
N
F
E
B
M
A
R
A
P
R
M
A
Y
J
U
N
J
U
L
A
U
G
S
E
P
O
C
T
N
O
V
D
E
C
2015
Administrative
© 2015 GALLAGHER BENEFIT SERVICES, INC.
Hired
During
April,
2013

Look-Back Method
On-Going Employees
Stability Period
(Coverage)
Measurement Period
(Eligibility)
Administrative
Administrative
N
O
V
D
E
C
J
A
N
F
E
B
M
A
R
A
P
R
M
A
Y
J
U
N
J
U
L
A
U
G
S
E
P
O
C
T
N
O
V
D
E
C
J
A
N
F
E
B
M
A
R
A
P
R
M
A
Y
J
U
N
J
U
L
A
U
G
S
E
P
O
C
T
N
O
V
D
E
C
2012 2013 2014
Measurement Period
(Eligibility)
Stability Period
(Coverage)
J
A
N
F
E
B
M
A
R
A
P
R
M
A
Y
J
U
N
J
U
L
A
U
G
S
E
P
O
C
T
N
O
V
D
E
C
2015
Administrative

Sample Corporation
Company Information
• 2014: Average Full Time and FTE count 175
• No Controlled Group
• Measurement Period: 11/1/2013 – 10/31/2014
• Stability Period: 1/1/2015 – 12/31/2015
Plan Design (Plan Year = Calendar Year)
• Fully-insured Bronze plan offered to all employees, spouses and
dependents (regardless full time status)
• Salaried employees may begin medical coverage 1st day of the month after
hire and pay $50/month for single coverage
• Hourly employees may begin medical coverage 1st day of the 2nd month
after hire and pay $1/hour for single coverage

Jane Doe
• Salaried employee
• Hire Date: 5/12/2000
• Termination Date: N/A
• 2013-2104 Measurement Period Monthly Hours: 173
• 2015 Monthly Salary: $2,000
• Elected family coverage in November, 2014 for 2015

Richard Roe
• Hourly employee
• Hire Date: 3/18/2005
• 2015 Hourly Salary: $25.00
• Hours 2015:
Jan Feb Mar Apr May Jun
125 135 140 140 135 135
Jul Aug Sep Oct Nov Dec
125 135 140 140 135 135

Mary Smith
• Salaried employee
• Hire Date: 4/2/2015
• Initial presumed weekly hours: 40
• Elected family coverage upon hire

Joe Hardworker
• Hourly employee
• Hire Date: 3/18/2005
• Termination Date: 8/25/2015 (coverage ends)
• Hours 2015:
125 135 140 140 135 135
125 55 0 0 0 0

Sam Jones
• Salaried employee (non-variable hour employee)
• Hire Date: 7/1/2015
• Initial presumed weekly hours: 40
• Waived medical coverage for 2015 upon hire

Leslie Loyal
• Hourly employee (variable hour employee)
• Hire Date: 2/20/2015
• Initial Measurement Period: 3/1/2015 – 2/28/2016
• Elected family coverage when hired
• Hours 2015:
0 30 140 140 135 135
125 135 140 140 135 135

Not required to file until considered full time

What Should You be Doing?
• Determine controlled group status/members
• Coordinate data collection/filing within controlled group
• Designated Government Entity for consolidated filing?
• Finalize outsourcing arrangements (if any)
• Finalized sledgehammer penalty protection strategy
• Collect 2014/2015 data by month (Payroll vendor?)
– Who is full time (Variable Hour Employees)?
– Who is offered coverage? Elected coverage?
– Was coverage Minimum Value? Affordable?
• Request dependent SSN
– Initial request, following 12/31 & 1 more time

GALLAGHER RESOURCES

Resources: ajghealthcarereform.com

Resources
• Forms Matrix: https://ajg.adobeconnect.com/_a815130238/s6055-6056-reporting-form-matrix/
• Decision Tree: https://ajg.adobeconnect.com/_a815130238/s6055-6056-reporting-flowchart/
• Flowchart: https://ajg.adobeconnect.com/_a815130238/s6055-6056-simplifiedreporting-flowchart/
• Reporting FAQs: https://ajg.adobeconnect.com/_a815130238/hcr_032014b/
• Counting Hours FAQs: http://www.ajg.com/knowledge-center/articles/employer-faqs-counting-hours/
• Checklist Insured: https://ajg.adobeconnect.com/_a815130238/hcr_032014d/
• Checklist Self-Funded: https://ajg.adobeconnect.com/_a815130238/hcr_032014e/
• Transition Relief: https://ajg.adobeconnect.com/_a815130238/s6056-transitionreliefreporting/
• Simplified Reporting: https://ajg.adobeconnect.com/_a815130238/s6056-6056-availability-
simplifiedreporting/
• Action Items Insured: https://ajg.adobeconnect.com/_a815130238/p6g80xg27q6/
• Action Items Self-Funded: https://ajg.adobeconnect.com/_a815130238/p63te5atmw9/
• Sample Employee Communications: https://ajg.adobeconnect.com/_a815130238/hcr_032014c/

Healthcare Reform Update: 6056 Reporting Forms

Recommended

Recommended

More Related Content

Similar to Healthcare Reform Update: 6056 Reporting Forms

Similar to Healthcare Reform Update: 6056 Reporting Forms (20)

Recently uploaded

Recently uploaded (20)

Healthcare Reform Update: 6056 Reporting Forms