Demystifying the ACA 1095-C and 1094-C Forms

Transcription

1 Demystifying the ACA 1095-C and 1094-C Forms June 9,

2 I am.. Cathy Kennedy, CPA Senior Tax Compliance Manager of NA 2

3 AGENDA Learn the basics of completing the Forms 1095-C and the 1094-C Transmittal Explain the different 1095 forms (A-C) and who should get each one. Review Parts I & II of Form 1095-C Review the codes in-dept for lines 14 & 16 and review some IRS examples Review Part III of form 1095-C 3

4 FACTS: Form 1095-A Health Insurance Marketplace Statement You would receive this if you or someone in your family enrolled in coverage through the Health Insurance Marketplace, which includes the Federally facilitated Exchange or one of the State Based Exchanges. This form is needed to complete the Form 8962 Premium Tax Credit which is filed with your tax return. Form 1095-B Health Coverage You would receive this form if you, your spouse or your dependents enrolled in coverage through an insurance provider or self-insured employer with < 50 employees Form 1095-C Employer Provided Health Insurance Offer and Coverage Insurance You would receive this from your employer if they offered you, your spouse and dependents coverage that you enrolled in or waived if they employed > 50 people. Due Date for all of these forms is January 31, 2017 for the employee 2016 Forms and March 31, if filing electronically, to the IRS. 4

5 Form 1095-C & Filing Requirements 1095-C Requirements: The C information returns are due to the IRS by February 28 th 2017 or March 31 st 2017 if filed electronically The 1095-C or similar statement is to be provided to every fulltime employee to use when filing their individual tax return by January 31, The statements must be mailed unless the recipient consents to receive the statement in an electronic format There must be only ONE Form 1095-C for each full-time employee of an employer 5

6 Form 1095-C Part I Form 1095-C Part I - Employee Info. & ALE Member Information Fill our Employee s name, SS#, address (line 1-6) Fill out ALE Member info on lines (7-13) 6

7 1095-C Part II Part II Employer Offer and Coverage What do the codes on line 14 mean? Line 14 Enter the Code Series 1A to 1I to identify an Offer of Coverage offered to an employee, the employee s spouse and dependents. 7

8 1095-C Part II Line 14 Codes What do the codes on line 14 mean? 8

9 1095-C Part II Line 14 Codes What do the codes on line 14 mean? MEC* Minimal Essential Coverage 9

10 Form 1095-C Part II Line 15 Complete only if code 1B, 1C, 1D or IE is entered on line 14 Enter the amount of the ee s share of the lowest-cost monthly premium for self-only minimum essential coverage providing minimum value that is offered to the employee. For Example: You have health care coverage for yourself, your spouse and your dependents and pay $ a month for this coverage. This is NOT the amount that will show up on line 15. Instead, the amount on line 15 is the amount your company offers coverage for self-only MEC providing minimum value per month. 10

11 Form 1095-C Part II Line 16 The code on line 16 explains why your employer did or did not offer you coverage. 11

12 Form 1095-C Part II Line 16 Line 16 Code Explanations: 12

13 Form 1095-C Part II Line 16 The code on line 16 explains why your employer did or did not offer you coverage. 13

14 Form 1095-C Line 16 2D Limited Non-Assessment period refers to a period when an ALE member will not be subject to an assessable payment for the 5 situations below only if the employee is offered health coverage by the 1 st day of the 1 st month following the end of the period which provides minimum value. January-March of the 1 st calendar year in which an employer is an ALE, but only for an employee who was not offered coverage by the employer at any point during the prior calendar year. Employee is under a waiting period due to the employer using a monthly measurement method Employee is under the initial measurement period and associated administrative period under the look-back measurement method. If the employee is a variable hour, seasonal or part-time ee but during the initial measurement period has a change in status 14

15 Form 1095-C Line IRS Example 15

16 Form 1095-C Line IRS Example 16

17 Form 1095-C & Filing Requirements - Continued Part III Covered Individuals (Lines 17-22) Complete Part III only if the employer is self insured and offers employer-sponsored health coverage Check the box if completing Part III This part must be completed by an employer offering self-insured health coverage for an employee for one or more months whether they were full-time or part-time if they were enrolled in the coverage The employee and the employee s covered family members under a self-insured plan must be listed in Part III. 17

18 QUESTIONS?????? 15 May

19 WE ARE ½ WAY DONE HANG IN THERE. 19

20 Agenda- 1094C Transmittal Who must file form 1094-C and the due date What an Authoritative Transmittal is and why one must be filed for each employer If multiple 1094-C s can be filed with the IRS Review Part II, III and IV Requirements for Form 1094-C Can an Extension be filed 15 May

21 1094-C Transmittal Who must file form 1094-C and the due date Employers with 50 or more full-time employees including FTE must file Forms 1094-C and 1095-C to report required information about their health coverage to the IRS under Sections 6055 (self-insured) and An employer subject to the Employer Shared Responsibility provision under Section 4980H must file one or more Forms 1094-C including one Authoritative Transmittal Due Date of Return Form 1094-C is due February 28, 2017 or March 31, 2017 if filed electronically. You must file electronically if filing more than 250 information returns, i.e C s. The 1094-C is filed with the Internal Revenue Service 21

22 Multiple 1094-C s and Part I Requirements: 22

23 Authoritative Transmittal: One Authoritative Transmittal must be filed for each employer even if multiple form 1094-C s are filed by and on behalf of the single employer. For Example: If a company has 2 divisions and each division reports its employees on a Form 1094-C, one of the Forms C filed must be designated as the Authoritative Transmittal and report aggregate employee-level data for both divisions. The Authoritative Transmittal reports aggregate employer-level data for the employer. If the company is reporting as the Authoritative Transmittal they would check the box line 19 and complete Part II, III and IV An ALE Member must file its own Authoritative Transmittal An ALE member is a single entity that is an ALE (Applicable Large Employer) or member of an Aggregated ALE Group. An example of an ALE Group is a parent and 10 wholly-owned subsidiaries. 23

24 Multiple 1094-C s and Part II Requirements: Can multiple 1094-C s can be filed with the IRS? Yes A Form 1094-C must be filed when an employer files one or more Forms 1095-C. PART II REQUIREMENTS: 24

25 Part II Requirements continued: Question #21 What is an Aggregated Group? Commonly owned or related affiliated employers which must combine their employees to determine their work size. They are treated as a single employer for purposes of determining whether an employer is an ALE. An Aggregated ALE Group - is a group of ALE Members treated as a single employer ALE Member An ALE member is a single entity that is an ALE or member of an Aggregated ALE Group. 25

26 Part II Requirements continued: Question #22 Certifications of Eligibility (Check all that apply) Qualifying Offer Method Qualifying Offer method Transition Relief Section 4980H Transition Relief 98% offer Method 26

27 Part II Requirements continued A Qualifying Offer is an offer that satisfies all of the following criteria: An offer of minimum essential coverage that provides minimum value; the employee cost for employee-only coverage for each month does not exceed 9.5 percent of the mainland single federal poverty line divided by 12; and an offer of minimum essential coverage is also made to the employee s spouse and dependents (if any). If a Qualifying Offer was made the employer would use code 1A on line 14 Definition of minimum value coverage If a plan covers at least 60% of the total allowed cost of benefits expected to be incurred under the plan it provides minimum value coverage The IRS and the Department of Health and Human Services have a minimum value calculator where employers plug in deductibles and copays to determine if the plan offers minimum value coverage 27

28 Part II Requirements continued Qualifying Offer method Transition Relief An Employer would check this box if eligible for and is using the Qualifying Offer Method Transition Relief for the 2015 calendar year to report information on Form 1095-C for one or more full-time employees. In order to be eligible: The Employer must certify that it made a Qualifying Offer for one or more months of the calendar year for 2015 to at least 70% 95% of its full-time ee s. No entry on line 15, Part II of the 1095-C is required Code 1A or 1l has to be used on line 14, Part II 28

29 Part II Requirements continued Transition Relief for 2015 The transition relief under Section 4980H is solely for the employer and does not affect the employee s potential eligibility for the premium tax credit 29

30 Transition Relief for 2015 There are 2 type of transition relief for Eligibility for these is reported on Form 1094-C line 22 box C (1) Employers with full-time employees No assessment payment under 4980H (a) or (b) will apply for any month during 2015 if the employer had in 2014 < 100 Full-Time employees has a non-calendar-year plan where a portion falls in 2016 To be eligible Employer cannot: 1. Reduce its worforce from Eliminate or reduce health coverage offered to ee s as of (2) Employers with 100 or more full-time employees If an employer had 100 or more full-time employees on business days in 2014 and is subject to the assessable payment under Section 4980H, the assessment is calculated by increasing the employer s exclusion number of fulltime employees to 80 instead of 30. See Regulations Section H-4(e) for more details 30

31 Part II & Part III Requirements continued 98% Offer Method An employer would check this box if it certifies that it offered for all months of the calendar year, affordable health coverage providing minimum value to at least 98% of its employees for whom it is filing a Form 1095-C and offered minimum essential coverage to those employees dependents If employer uses this method they do not have to complete Part III Column (b) of the 1094-C form 31

32 PART III REQUIREMENTS: 32

33 PART III REQUIREMENTS: Question # 23 (a) o If they offered Minimum Essential Coverage to at least 70% 95% of its fulltime employees and their dependents If the employer offered MEC to at least 70% 95% of its full-time employees and their dependents for the entire year put an x in the Yes box on line 23 for all 12 month or the months it was offered. Put an x in the No box for each month the employer did not offer MEC to at least 70% 95% of its employees. Offers of MEC to at least 70% of FT Employees and their Dependents For 2015, 70% is substituted for 95% 33

34 PART III REQUIREMENTS: Question # 23 (a) Offers of Minimum Essential Coverage to at Least 70 Percent of Full-Time Employees (and Their Dependents) One of the two employer shared responsibility payments relates to whether an employer offered minimum essential coverage to at least 95 percent of its full-time employees (and their dependents). For 2015 (and, in addition, for employers with a non-calendar year plan year, for the months in 2016 that are part of the 2015 plan year), 70 percent is substituted for 95 percent. However, even if an employer offers minimum essential coverage to at least 70 percent of its full-time employees (and their dependents) for 2015, it may still be subject to the other type of employer shared responsibility payment that applies if a full-time employee receives the premium tax credit for purchasing coverage through the Health Insurance Marketplace. For more information about this relief, see section XV.D.7.a of the preamble to the ESRP regulations. 34

35 Part III Requirements Continued Question #23 (b) - Full-time employee count by month Enter the number of full-time employee s for each month, but do not count employee s in a Limited Non-Assessment Period. Limited Non- Assessment Period A period during which an ALE Member will not be subject to an assessable payment under section 4980H(a) and in certain cases section 4980H(b) for a full-time employee regardless of whether that employee is offered health coverage during that period Exception If the employer certifies that it is eligible for the 98% Offer Method on Line 22 box D then do not complete column (b) 35

36 Part III Requirements Continued: Question #23 (c) Total Employee Count for ALE Member Include the total number of employees, including full-time and non-full-time employee. Also include employees in a Limited Non-Assessment Period for each calendar month. An employer must choose one of the following days to determine the # of ee s per month and must use the same day for all months of the year The 1 st day of each month The last day of each month The 1 st day of the 1 st payroll period that starts during each month The last day of the first payroll period that starts during each month. 36

37 Part III Requirements Continued: Question #23 (d) Aggregated Group Indicator This must be completed if the ALE Member was part of an Aggregated ALE Group and marked the box Yes on line 21. If the employer was a member of an Aggregated ALE Group during each month of the calendar year enter X in the All 12 Month box If the employer was not a member for all 12 months but was a member for one or more months indicate which months by entering an X for the applicable months. Question #23 (e) Use one the 2 following codes if company certifies that section 4980H Transition Relief is Applicable o Column (e) 4980H Transition Relief Indicator o Code A Eligible for the Relief o Code B Eligible for the 100 or more Relief 37

38 Part IV Requirements & Extensions 38

39 Part IV Requirements & Extensions Part IV Other ALE Members of Aggregated ALE Group If the employer was a member of an Aggregated ALE Group for any month of the calendar year, enter the names and EIN # s up to 30 of the other Aggregated ALE Group members. If >30 then enter only 30 with the highest monthly average number of full-time employees List in descending order listing first the member with the highest average monthly # of full-time employees EXTENSIONS Form 1094-C must be filed by February 28, 2017 if paper return or by March 31, 2017 if filed electronically. File Form 8809 online through the FIRE system at: Maximum extension is 30 days and is automatic 39

40 QUESTIONS?????? 15 May

41 Resources Additional Resources calculator&site=hhs&entqr=3&ud=1&sort=date %3AD%3AL%3Ad1&output=xml_no_dtd&ie=UT F-8&oe=UTF- 8&lr=lang_en&client=HHS&proxystylesheet=HH S 41

42 Congratulations You Made It to the END! Give Yourself A Hand 42