q a on aca reporting by self-insured employers€¦ · a on aca reporting by self-insured employers...
TRANSCRIPT
Q&A on ACA Reporting
by Self-Insured Employers2/19/2016
Clarifying the number soup ofACA rules in the Internal Revenue Code
SECTION 6055 REPORTINGInformation required from every provider of health insurance, including:
Insurance companies that issue health plans
Employers that sponsor group health plans that are self-insured
Due from every self-insured company regardless of FTE count
Due to every covered individual
Often called 1095-B reporting
SECTION 6056 REPORTINGInformation required from every Applicable Large Employer, including:
Employers with 50 and more full-time employees, including equivalents
Employers with fewer than 50 FTEs that are part of a commonly controlled or affiliated group whose combined FTE count is 50 or more (Slide 4)
Due from every standalone ALE, and every ALE member of an ALE group
Due to every ACA-defined full-time employee
Known as 1095-C reporting
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© Integrity Data 2015. All rights reserved
Lessening the reporting burden?Compounding the confusion?
• Part II of Form 1095-C satisfies Section 6056 reporting
• Part III of Form 1095-C satisfies Section 6055 reporting
Originally, IRS guidance was that employers who sponsor self-insured group health plans would produce and submit both 1095-C and 1095-B forms.
Overwhelming public comment against this requirement forced the IRS to redesign Form 1095-C so that it satisfied both reporting requirements.
Part III of Form 1095-C looks like a 1095-B and is used to combine the two reporting requirements into one document.
© Integrity Data 2016. All rights reserved.
© Integrity Data 2015. All rights reserved
IRS criteria for companies to be commonly controlled or affiliated
• Do the companies have owners in common?
• Do the companies provide services to one another?
• Jointly, do the companies provide services to others?
‘YES’ to any of these questions means that companies must meet IRS Controlled Group
Rules.
Called the 414 or Controlled Group Rules, these criteria are found in Section 414(b), (c), (n), and (o) of the Internal Revenue Code.
What is the difference between Part II and Part III of a 1095-C?
• Part II documents for the IRS whether an organization was compliant with the ACA employer mandate that affordable health insurance which provides minimum value was offered to eligible employees.
• Part III is used ONLY by self-insured employers. This part tells the IRS, and individuals, which months of the year an employee and their dependents were covered. Information in this part is used to validate compliance with the ACA individual mandate.
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Must-read blog posts
•FAQ from self-insured employers: Why is Part II of 1095-C conflicting with Part III?
•1095 clarity: Dependents’ SSNs are required from self-insured employers
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IRS answers to questions relating to self-insured employers
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Does an employer that must file returns under Section 6055 –as a provider of self-insured health coverage to its employees –and under Section 6056 – as an Applicable Large Employer –file combined information returns and statements?
• Yes. An Applicable Large Employer (ALE) member, as defined in the employer shared responsibility provisions under section 4980H, that provides self-insured coverage is subject to the reporting requirements of both Section 6055 and Section 6056.
• To streamline and prevent duplication under each reporting requirement, ALEs with self-insured coverage will combine Section 6055 and Section 6056 reporting.
• An ALE with self-insured coverage will report on Form 1095-C, completing separate sections to report the information required under sections 6055 and 6056. An ALE that provides insured coverage will complete only the section of Form 1095-C that reports the information required under Section 6056.
https://www.irs.gov/Affordable-Care-Act/Questions-and-Answers-on-Information-Reporting-by-Health-Coverage-Providers-Section-6055
To whom must a provider of health coverage furnish the statement?
• A health coverage provider must furnish the statement to a responsible individual.
• The responsible individual generally is the person who enrolls one or more individuals, which may include him or herself, in minimum essential coverage.
• The responsible individual may be the primary insured, employee, former employee, uniformed services sponsor, parent, or other related person named on the coverage application.
https://www.irs.gov/Affordable-Care-Act/Questions-and-Answers-on-Information-Reporting-by-Health-Coverage-Providers-Section-6055
How must a health coverage provider furnish the form to the responsible individual?
• A health coverage provider generally must mail the statement to the responsible individual’s last known permanent address; if no permanent address is known, to the individual’s temporary address.
• A provider’s first class mailing to the last known permanent address – or if no permanent address is known, the temporary address –discharges the provider’s requirement to furnish the statement.
• A health coverage provider also may furnish the statement electronically to the responsible individual if the responsible individual affirmatively consents to it.
https://www.irs.gov/Affordable-Care-Act/Questions-and-Answers-on-Information-Reporting-by-Health-Coverage-Providers-Section-6055
If some or all of its covered individuals may be exempt from the individual shared responsibility provision, must a health coverage provider report under Section 6055?
• Yes.
• A health coverage provider may not have the information necessary to determine whether an individual is exempt from the shared responsibility provision.
• To ensure complete and accurate reporting, providers must report under Section 6055 for all their covered individuals.
https://www.irs.gov/Affordable-Care-Act/Questions-and-Answers-on-Information-Reporting-by-Health-Coverage-Providers-Section-6055
“Employer shared responsibility provisions apply to employers that are ALEs, even if employees are exempt from the individual shared responsibility provision – which would include members of a federally recognized Indian tribe.
For purposes of determining whether the employer is an applicable large employer, all employees are counted, subject to the seasonal work exception we talked about, and that's regardless of whether they are exempt from the individual shared responsibility provision. So all applicable large employers with full-time employees who are exempt from the individual shared responsibility provision will be subject to the employer shared responsibility provisions – if they are an ALE.
Employees who are exempt from the individual shared responsibility provision may be eligible for a premium tax credit. And if no full-time employees receive the premium tax credit, the employer won't be subject to the employer shared responsibility payment.
However, if an applicable large employer does not offer coverage to its full-time employees and their dependents, and a full-time employee receives the premium tax credit, they will be liable for the employer shared responsibility payment – categorically based on the number of full-time employees.
So the bottom line is the employer shared responsibility provisions still apply – regardless of whether an employee may be exempt from the individual shared responsibility provision.”
Tim Berger | Tax Law Specialist, Internal Revenue ServiceExempt Organizations Office, Tax Exempt and Government Entities Division | Washington, DC
in a group call on May 15, 2015
If employer shared
responsibility provisions do
apply to Indian Tribal
Governments, would the employer
have to ever offer coverage
when they may know that their
employees have
exemption status?
Must a government employer report under Section 6055 if it maintains a self-insured plan?
• Yes.
• However, unless prohibited by other law, a government employer that maintains a self-insured group health plan may designate a related governmental unit, or an agency or instrumentality of a governmental unit, as the person to file the returns and furnish the statements for some or all individuals covered under that plan.
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https://www.irs.gov/Affordable-Care-Act/Questions-and-Answers-on-Information-Reporting-by-Health-Coverage-Providers-Section-6055
Fire away!What questions do you and your team members have
about ACA reporting by self-insured employers?
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Our answers to questions frequently asked by self-insured employers
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I am told that we must report coverage on a 1095-B if we are self-insured. Is that correct?
• If you have 50 or more full-time employees, including equivalents, you MUST file a 1095-C with Part III filled out for all individuals covered in any month.
• Employers with fewer than 50 FTEs, who are self-insured, may file a 1095-B if their organization does not meet IRS criteria for being part of an Applicable Large Employer group. (See Slide 4.)
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We have retired employees to whom we provide health insurance under a self-insured plan. I noticed that in Part II, it shows that we did not provide coverage (1H) yet in Part III for that same month there is a check box. Why?
• You need to separate the two parts, to understand what reporting is required and your role in meeting two different reporting obligations –both as an employer (Part II) and as the insurance carrier (Part III).• Part II documents whether you offered coverage under the employer shared
responsibility provisions. (Since the retired employee did not work, you were under no obligation to provide them affordable health coverage that offers minimum value.)
• Part III satisfies the reporting responsibility of an insurance provider, who must report on every individual that was covered and which months they were covered.
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In the middle of the year, we went from a self-insured plan to a fully insured plan. Do I need to fill in Part III for the entire year if we were self-insured for part of the year?
• You only fill in Part III for the months in which you offered self-insured coverage. You do not fill in Part III for the months in which you were fully insured.
• For the months in which you were fully insured, the insurance carrier is responsible for providing the individual a 1095-B that documents each month they were covered under that plan.
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Our insurance carrier told us that they would be providing 1095-Bs to everyone covered even though we are self-insured. Do I still need to fill out Part III?
• The requirement to fill out Part III does not change if you were told that the insurance carrier would produce their own 1095-B.
• As the provider, you must report as though the carrier were not reporting.
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Why is my dependent information not showing up on the 1095-C?
It was imported. But when closing the year and printing the 1095-C, the dependent information is missing.
When the dependent information was imported, a benefit code that was not tagged as being self-insured may have been used. When importing dependent data, be sure to import a benefit code that was set up in the ACA Plan Setup and was tagged as being self-insured.
In the case above, the customer had multiple benefit codes with only the least-cost plan being setup in the ACA Plan Setup. The BENEFIT column in the table PJACADepBenefitMSTR had a benefit code that was not in the ACA Plan Setup. The BENEFIT column must be populated with a benefit code that is setup in the ACA Plan Setup and must be set to self-insured.
How do you code employees whose benefits are extended through COBRA?
• From the employee standpoint on termination, nothing changes. You update their employee record as being terminated and the date they were terminated.
• Further tracking has to do with whether you had offered self-insured coverage.
• If the employer offers self-insured coverage, you will continue to have them as a record on the ACA Dependent Benefit Maintenance. The end date of coverage dictates when Part III of the 1095-C will have a checkbox on the month of coverage. In this case, Part II will show a terminated employee who had no hours associated with some months while Part III will have checkboxes selected for those months.
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We are self-insured and noticed that, in keeping information about dependents, you specifically designate whether the dependent being covered is a spouse.
Why is that detail important?
• ACA regulations in the IRS tax code define “dependent” as a child of an employee (excluding a stepson, stepdaughter or an eligible foster child) who has not attained age 26.
• For this purpose, a dependent does not include the spouse of an employee. There is no penalty for not offering coverage to a spouse.
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Resources as March 31 approaches
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© Integrity Data 2015. All rights reserved
March 31, 2016 – Employees must have 1095-Cs
May 31, 2016 – Paper copies, with 1094-C transmittal, must be mailed to the IRS
June 30, 2016 – Electronic copies, with 1094-C transmittal, must be filed with the IRS
New ACA reporting deadlines
http://www.integrity-data.com/irs-extends-1095-c-production-and-filing-deadlines/
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A different type of ACA tracking to keep in mind
© Integrity Data 2016. All rights reserved.
to get Support questions answered.
So that we can track your concern –and see that everyone who must weigh in on
the answer can do so, always email this address.
Other helpful blog posts
• IRS extends 1095-C production and filing deadlines
• What does a 1095-C delay mean for 1040 filings?
• ACA Code 1A alert: IRS clarifies 1095-C guidance for a Qualifying Offer
• Manage ACA compliance for Tax Year 2016: Know the IRS penalty risks
• 1095-C reporting: How to use affordability safe harbors
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Pages to bookmark
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Find slide decks and recordings from past ACA User Group lessons on this page:http://www.integrity-data.com/aca-user-group-content-library
Password: ACAUG
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IRS answers to ACA questionsInformation Reporting by Employers on Form 1094-C and Form 1095-C
Information Reporting of Offers of Health Insurance Coverage by Employers (Section 6056)
Information Reporting by Health Coverage Providers (Section 6055)
Employer Shared Responsibility
Employer Health Care Arrangements
Employer Shared Responsibility Provision
Information Reporting Requirements for ALEs
Additional Information Reporting Requirements for Providers (Self-Insured ALEs)
Links from the Integrity Data site
to ACA guidance from the IRS:
ACA resources on the IRS website
IRS tax tips to receive by email
IRS handles to follow on social media
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Affordable Care Act reporting FAQs on Integrity Data’s site:• Go to http://www.integrity-data.com/knowledge-base/• Then click on ‘ACA Reporting Requirements’ or ‘ACA Compliance Solution’
E-filing is encouraged by the IRS, but uncertainty remains
about the testing required for individual companies’ submissions.
To get started on obtaining a Transmitter Control Code (TCC)
for the AIR system, visit
https://la1.www4.irs.gov/e-services/Registration/index.htm
Added guidance from Integrity Data on obtaining a TCC specific to the AIR system:
http://www.integrity-data.com/important-note-on-the-irs-requirement-for-electronic-filing-of-form-1094-c/
Upcoming lessonsfor our ACA User Group
Monday, February 22Deep Dive into Generation of IRS Form 1095-C
Thursday, February 25, 2016ACA Year-End Close
Monday, February 29, 2016Open Q&A for ACA Tracking and Reporting
DAYS OF THE WEEK WILL VARY BUT
THE LESSON TIME WILL ALWAYS BE:
• 2:30 p.m. Eastern• 1:30 p.m. Central• 12:30 p.m. Mountain• 11:30 a.m. Pacific• 9:30 a.m. Alaskan• 8:30 a.m. Hawaiian-Aleutian
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and you’ll receive a $10 gift card to Starbucks.
Please emailMarleen De Winter
Thank you for joining us
To add team members to our webinar notification list:
Email Lindy Belley
www.integrity-data.com888.786.6162
For clarifications on details presented and to suggest topics for future webinars:
Email Helen Karakoudas
Ernie [email protected]
