David L Farrell Regional Sales Director Paycor Inc. Affordable Care Act Reporting

Transcription

1 David L Farrell Regional Sales Director Paycor Inc Affordable Care Act Reporting

2 Agenda Who is Paycor Review of the Affordable Care Act Individual vs. employer mandate Required IRS filings for employers Best Practices Bonus DOL Changes discussion!

3 Paycor Founded in 1990 by Bob Coughlan Owner led employee owned 28,000 clients nationwide We serve 1-5,000 employee companies Suite of services Payroll, HRIS, Time, Onboarding, ATS, some W/C What we DON T SELL Health Insurance or 401k (or much W/C) We re known for Award winning technology and customer service Helping our clients reduce cost, engage employees, improved analytics, and improved compliance 3

4 Consult a Professional Paycor is not engaged in providing legal advice, or tax advice. Consult a legal or accounting professional to ensure you understand your client s risk with regards to ACA reporting This information is subject to change as the IRS changes it s ACA regulations 4

5 Review of the Affordable Care Act ACA was designed to ensure that Americans have health insurance Individuals can obtain insurance two ways: 1. Through the Marketplace (tax credits are available for those who can t afford it) 2. Through their employer if they work 30 hours or more weekly.

6 Review of the Affordable Care Act IRS needs accountability from employers that they are complying with the law They want to know Who has coverage What kind of coverage they have Where did they get it IRS wants to make sure employers who are supposed to be providing coverage are doing so if not, they can be penalized.

7 Required IRS filings ACA added two new reporting and filing requirements related to health insurance coverage Section 6055 deals with the individual mandate Section 6056 deals with the employer mandate.

8 Section 6055 & the Individual Mandate Beginning in 2014, PPACA requires all non-exempt individuals to either maintain minimum essential coverage ( MEC ) or pay a penalty as part of their income tax returns for every month they go without MEC Section 6055 reporting is necessary to determine whether individuals are maintaining MEC Returns must be filed with the IRS and statements furnished to covered individuals.

9 Section 6056 & the Employer Mandate Requires applicable large employers to file returns with the IRS and provide statements to full-time employees about the health insurance coverage offered Information used to determine if the employer has complied with the Employer Shared Responsibility mandate and to determine if individual is eligible for premium assistance. Applies to all Applicable Large Employers

10 Required IRS filings overview *Must file electronically if providing 250 or more Reporting Who Reports Transmittal Form IRS Deadline Paycor Filing? 6055 Small Employer withself-insured Plan 1094-B 1095-B 1/31 of each year (2/1/16) No 6055 Insurer 1094-B 1095-B 1/31 of each year (2/1/16) 6056 Large Employer with Fully Insured Plan 6055/6056 Large Employer withself-insured Plan 1094-C 1095-C 2/28 (or 3/31 if filed electronically*) 1094-C 1095-C 2/28 (or 3/31 if filed electronically*) No Yes Yes

11 Penalties for not filing Penalties increased in late July to $250 per return Up to maximum of $3million under Sections 6721 and 6722 If the failure relates to both an information return and a payee statement, penalties are doubled to $500 and $6 million Special relief for 2015: no penalties will be imposed as long as the filing entity makes a good faith effort to comply (clients FTE) However, you don t want to invite the IRS into your business.

12 WHAT INFORMATION IS REQUIRED FOR THE 1095-C AND 1094-C?

13 Form 1095-C: Part I Information about both the employee and employer Lines 1-6: Employee information including SSN Lines 7-13: Employer information Line 10: Contact telephone number who the recipient may call about the information reported Static payroll/benefit admin data Static payroll/benefit admin data Comes from client.

14 Form 1095-C: Part II Line 14: Offer of Coverage, for each month enter a Series 1 code from the instructions Line 15:Report the amount of the employee s share of the lowest cost monthly premium for self-only coverage Line 16: Safe Harbor Codes, for each month enter a Series 2 code from the instructions. Client/benefit admin Client/benefit admin Client/benefit admin

15 Information required All Applicable Large Employers (self-funded or fully-insured) Line 14 Code Series 1 (Offer of coverage codes) CODE DESCRIPTION HOW COMMON 1A MV offered at less than 9.5% of FPL ($93.18/mo) Common 1B Offer to EE only Rare 1C Offer to EE + Dependent(not spouse) Rare 1D Offer to EE + Spouse (non dependent) Rare 1E MV offeredto EE, at least MEC offered to spouse & deps Common 1F MEC that is not MV offered to employee Some 1G Self-funded offered to part-time EE Rare 1H No offer of coverage to full-time employee Common 1I No offer to employee but employer using qualifying offer relief?

16 Information required All Applicable Large Employers (self-funded or fully-insured) Line 16 Code Series 2 (safe harbor codes) CODE DESCRIPTION 2A Not employed any day that month 2B Part-time or termination month when not covered all month 2C Enrolled in coverage (Use over any other code if applicable) 2D EE in non-assessment period (e.g. waiting period) 2E Multi-employer plan interim relief 2F W-2 Safe harbor 2G FPL safe-harbor 2H Rate of pay safe harbor 2I Non-calendar year plan employer transition relief

17 Form 1095-C: Part III This section only applies to organizations with self-insured plans Data comes from benefit admin.

18 Form 1094-C: Part I Attach all 1095-C filings to this transmittal form: Lines 1-6: Employer information Lines 7-8: Contact information for individual responsible for addressing IRS questions about the form Lines 9-16: Employer Information Line 17: Reserved line for IRS use Line 18: Total number of 1095-Cs submitted. Comes from payroll/benefit admin Comes from client Comes from benefit admin???? Derived number of 1095-Cs generated from system used for filing

19 Form 1094-C: Part II Lines 19-21: For filings where there are related employers and where each is filing for their own group Line 22: If an employer files under one of the four optional filing methods, the filer discloses which method they are using Comes from client Comes from client/benefit admin.

20 Line 22: special reporting rules Qualifying Offer Employer offers MV coverage with employee cost less than 9.5% of FPL ($93.18 in 2015) Benefits to employer: Enter code 1A in line 14 of 1095 and employer does not have to provide cost of lowest cost plan on line 15 Can provide a simplified statement to employees instead of a copy of the 1095 Problem with the simplified statement approach Employer still has to provide a 1095 to the IRS why not just give the employees a copy Self-funded employers cannot use the simplified statement for anyone who has elected coverage

21 Line 22: special reporting rules 98% Offer Employer offers affordable MV coverage to 98% of full time employees Benefits to employer: Employer does not have to provide number of full-time employees by month in column (b) of 1094

22 Form 1094-C: Parts III and IV Column (a): Did employer offer coverage to 95% of full-time? Column (b): Number of full-time employees Column (c): Total number of employees Column (d): Is employer part of a controlled group? Column (e): Transition relief code Code A for FTE relief Code B for all other 100+ transition relief Lines 36-65: Names and EINS of other ALE Members of the Aggregated ALE Group (if applicable) Comes from insurer Comes from payroll (ALE report) Comes from payroll (ALE report) Comes from benefit admin/client Comes from benefit admin/client Comes from benefit admin/client.

23 What is Paycor doing to help? Products that can help Benefits administration tool Time and attendance tracking Reporting & Analytics: ACA reporting to help you determine ALE status, employee eligibility and plan affordability Filing assistance for 1095-C and 1094-C We will aggregate information from our systems Clients that are not using Paycor s benefit administration or time and attendance system can import or enter information through a client portal for an additional fee We will file the 1094-C and 1095-C forms on the client s behalf.

24 Client Data Name and Contact Number of responsible Person Control Group Y/N Related Company EINs Optional Filing Method selection Am I a Large Employer? Which of my Eesare eligible? Are my Benefits Affordable? Measurement, Stability, and Admin Periods tracking 1094-C Cs Reporting Payroll Data Static Payroll Data EE SSN Number of FTEs ACA Compliance ER Info -FEIN Contact Name Total number of 1095-Cs Related EINs Filing Method Selected Number of FTEs Open Enrollment/ Ben Admin Offer of Coverage Amount of EE share for Self only Coverage Safe Harbor Codes ER Info Transition Code Relief C Time & Attendance Data PPACA Hours Measurement, Administrative & Stability Periods EE info including SSN EE Depending info including dependent SSN ER info Contact number Offer of Coverage Amount of EE share Safe Harbor Codes C

25 Best Practices 1. Determine how you are impacted by this regulation 2. Create a strategy to complete the tax filings 3. Determine WHO will be responsible for gathering benefit data each month 4. Determine WHO will be responsible for the 1094-C and 1095-C 5. Connect with your local Paycor rep to discuss our ACA Tools Don t forget about the New DOL Change for 2016!!

26 The New DOL Law What: The Department of Labor has proposed an increase to the threshold salary level needed to qualify for the white collar exemptions from $455/week ($23,600 per year) to $970/week ($50,400/year). This means Under the proposed law, any salaried exempt employee who earns under $50,440 should be also paid overtime pay for any additional hours above 40 per week. Employees who are affected by this law must be paid overtime for the hours they work above 40 hours per week. This proposed update is expected to be put into law in early to late With that in mind, employers should start planning to also do the following 26

27 Consider your options in 2016 We expect employers to pick between four options. Do nothing and watch an employee s annual pay grow. Adjust employees to an hourly rate. Then adjust the hourly rate based on hours the employee typically works. Bump up affected employee s salaries to $50,440. Mandate no overtime. Manage it profusely. 27

28 Paycor data shows that 65% of employers have one employee or more who are affected by the threshold increase. To Do Today You Need a Plan Determine if you are affected Understand which employees are affected Determine the hours they work and start tracking your salaried employees hours now! 28

29 Thank You! David L. Farrell Regional Sales Director Paycor Inc