HEALTH CARE REFORM: NAVIGATING THE REPORTING MAZE

Transcription

1 HEALTH CARE REFORM: NAVIGATING THE REPORTING MAZE Presented By: Bill Heinz Benefits Consultant Deb Svihovec Benefit Consultant Associated Financial Group

2 AGENDA Penalty Assessment Process Reporting Obligations Overview Form 1094C Form 1095C 2015 To do List

3 ADDITIONAL PENALTIES (DID YOU KNOW?) $100 Penalty for each form never filed or not corrected until after August 1 st $60 Penalty for every form filed or corrected more than 30 days after due date but before August 1st $30 Penalty for every form filed or corrected within 30 days of due date 4980H Penalties Inaccurate data on 1094C/1095C may lead to incorrect assessment of play or pay penalties $2000 PER EMPLOYEE (x the number of FT employees) for not offering coverage $3000 per employee that the plan is deemed not affordable 2

4 ACA REPORTING PROCESS 1. Tracking & Identification 2. Generate Codes / Data 3. Populate Forms 4. Print & Distribute 5. File with IRS ACA-FT employees Individuals enrolled in SF coverage 1094C Part II 1095C Part II, Lines Transfer codes & data to paper forms and/or generate electronic files ACA-FT employees Individuals enrolled in SF coverage Paper (< Cs) Electronic ( Cs) Review which step each district feels they are on in the reporting process. *** Focusing on the reporting process allows better understanding of the full purpose of the Pay or Play Information Guide (now you know why it is important to understand eligibilty, etc) 3

5 PLAY OR PAY STRATEGIC PLANNING & IMPLEMENTATION PROCESS 4

6 EMPLOYER PROFILE Total Employee Count: Total ACA-FT Employee Count: Number of Union Employees By Union/Bargaining Unit: Total Employees Eligible for Employer Sponsored Health Plans Are you a ALE? (Applicable Large Employer) 100+ employees Medium Employer? employees Small Employer? Less than 50 employee All ALE s and Medium Employers must do the reporting 5

7 IDENTIFY FULL-TIME EMPLOYEES Identify Common Law Employees W-2 employees Includes substitute teachers Coaches Ticket takers and all other part-time employees Choose Measurement Method Standard Measurement Administrative Period Stability Period Hours of Service Identify ACA-FT Employees ACA-FT means anyone working 30 hours per week or more Optional is anyone scheduled 30 hours or more per week 6

8 OFFER AND COST OF COVERAGE Determine Who Will Be Offered Coverage Employee Health Plan Eligibility Dependent Health Plan Eligibility Annual Open Enrollment Determine Cost of Coverage Minimum Value (MEC / MV) Cost of Coverage Cash in Lieu Gray area at this time, but likely to be considered flex credit Other Flex Credits Employees are provided ($XX.XX) a month in flex credits that can be applied towards any of benefits (medical, dental, vision, etc.) with any excess credits available as cash. 7

9 CASH IN LIEU Employers with cash in lieu must decide how they intend to address this issue Apply the technical rules Add cash in lieu payments to cost of coverage Increases chances coverage is not affordable Ignore the technical rules Do not add cash in lieu payments to cost of coverage Future guidance may confirm this is incorrect Drop the cash in lieu benefit 8

10 PLAY OR PAY ASSESSMENT PROCESS Certification* Reporting 3. Initial IRS Contact 4. Demand for Payment * 1411 Employee has qualified for a subsidy and Employer may be subject to a penalty Appeal process: Did you offer coverage? MV? Affordable? Wages? DO NOT IGNORE ANY 1411 CERTIFICATIONS YOU RECEIVE

11 PREPARE FOR REPORTING OBLIGATIONS 6055 Reporting Reports individuals who were enrolled in employer s health plan Self-funded employers only (insurance company will report on behalf of fully-insured employers) 6056 Reporting Reports identity of all FT employees, whether they were offered coverage, and cost of that coverage All Applicable Large and Medium Employers 10

12 FINAL REPORTING FORMS Exchange Form (never prepared by employer) Form 1095A Only if not an ALE, but sponsors self-funded plan (seldom prepared by employer) Form1094B Form 1095B All ALEs with Full-Time Employees (include self-funded plan info, if applicable) Form 1094C - Form 1095C -

13 1094B/1095B Very few employers will be required to file these forms Employer with self-funded plan who is not an ALE All employees, dependents, and other participants enrolled on a fullyinsured plan should receive a Form 1095B from the insurance company. Be sure to let your employees know to expect these from all employers that they worked at least full-time for any month. Must have all of these reports to file their income tax 12

14 1094C/1095C Required for all ALEs, regardless of whether they will owe a play or pay, including medium employers 1094C (master transmittal report) All ALEs complete Parts I, II, lll, and IV (if control group) 1095C (individual report) 1095C must be prepared for any employee who was full-time (FT) at any time during the calendar year. Bret was FT during all 12 months of C required David was FT January thru October C required Yvonne was FT only in April C required Ragan was not FT during any month of C not required All ALEs complete Parts I and II ALEs that offer a self-funded plan also complete Part III ( 6055 information) 13

15 FORM 1094C PARTS I & II 14

16 FORM 1094C PART III 15

17 1094C/1095C Required for all ALEs, regardless of whether they will owe a play or pay, including medium employers 1094C (master transmittal report) All ALEs complete Parts I, II, and III 1095C (individual report) 1095C must be prepared for any employee who was full-time (FT) at any time during the calendar year. Bret was FT during all 12 months of C required David was FT January thru October C required Yvonne was FT only in April C required Ragan was not FT during any month of C not required All ALEs complete Parts I and II ALEs that offer a self-funded plan also complete Part III ( 6055 information) 16

18 FORM 1095C ONLY COMPLETE PART III IF SELF-FUNDED 17

19 FORM 1095C PART II Part II: All employers must complete Part II of the 1095C. Separate entry must be made for each calendar month on Lines unless: Data for the line is the same all 12 months, in which case only the All 12 Months box is completed and monthly boxes are left blank. Employer is using Qualifying Offer Method or Qualifying Offer Method Transition Relief, in which case Line 15 is skipped Certain codes entered in Line 14 allow you to skip Line 15 for that month (or all 12 months) No Line 16 code applies for a given month (or all 12 months) 18

20 FORM 1095C PART II 1E 1H Line 14: Line 14 codes indicate whether the employee was offered coverage, whether that coverage was MV or not, and whether the employee s spouse and children were offered coverage. The Line 14 code indicates only that coverage was offered, not whether the employee and/or their dependents actually enrolls in that coverage Line 16 and/or Part III will indicate if the employee enrolls in coverage. One (and only one) code must appear in each of the 12 calendar month boxes (or the All 12 Months box if the same code applies for the entire year). A code must be entered in each box in Line 14 regardless of whether or not the employee can trigger a penalty for that month The Line 16 codes will indicate the reason, if any, that no penalty applies. 19

21 FORM 1095C PART II Line 15: If code 1B, 1C, 1D or 1E (MEC/MV offer codes) entered on Line 14 for a given month, enter employee cost for single coverage on lowest cost MV plan available to the employee for that month on Line 15. Amount entered on Line 15 is typically not the amount the employee actually pays for any coverage elected. It is the amount the employee would have paid if they had enrolled in single coverage on the lowest cost MV plan available to the employee. If all employees are eligible for the same plans at the same cost, then this amount should be the same for all employees. If different classes of employees are eligible for different plans or are charged different rates, then this amount will vary from one 1095C to the next, depending on plans available and/or costs for that particular employee. 20

22 FORM 1095C PART II 2C 2A 2D 2B 2F Line 16: Line 16 codes indicate the reason, if any, the employer is not subject to a play or pay penalty with respect to the employee for that month, E.g. Employee enrolled in employer coverage that month; Employee was not employed, not ACA-FT, or in a limited non-assessment period that month; Affordability safe harbor applied for that month. Only one code must appear in each of the 12 calendar month boxes (or the All 12 Months box if the same code applies for the entire year) If more than one code applies for a given month, enter the code in the following order of precedence: 2C 2A 2E 2I 2D 2B 2F/2G/2H If no code applies for a given month, leave that month s box blank 21

23 COBRA REPORTING Variables Coverage end date Was employee enrolled? Does employee elect COBRA? Line 15 amount is the cost of single COBRA coverage (even if employee elects family COBRA) on cheapest plan available to the employee Who elects COBRA? How many COBRA options? Current Plan Year Next Plan Year Is COBRA coverage self-funded or fully-insured? 22

24 FINAL 1094C/1095C FORMS & INSTRUCTIONS Final 2015 Forms & Instructions Released 9/16/2015 Final Forms 1094B/1095B and 1094C/1095C Final instructions for all forms Two important changes in final instructions Reporting COBRA to a terminated employee HRA reporting 23

25 FINAL 1094C/1095C FORMS & INSTRUCTIONS Reporting COBRA Coverage Under final instructions, COBRA offered to a terminated employee is not reported as an offer of coverage on 1095C Part II, regardless of whether the employee elects COBRA or not. 24

26 FINAL 1094C/1095C FORMS & INSTRUCTIONS Coverage runs thru last day of the month Month of termination Line 14: Code 1E Line 15: Lowest cost single coverage Line 16: Code 2C All subsequent months thru end of calendar year Line 14: Code 1H Line 15: Blank Line 16: Code 2A Coverage ends immediately upon termination of employment Month of termination Line 14: Code 1H Line 15: Blank Line 16: Code 2B All subsequent months thru end of calendar year Line 14: Code 1H Line 15: Blank Line 16: Code 2A 25

27 FINAL 1094C/1095C FORMS & INSTRUCTIONS New rules should prevent 6055 reporting for most HRAs As long as individual only has access to HRA if enrolled on employer s major medical plan When would HRAs still be subject to 6055 reporting? Employer offers active employee HRA coverage that integrates with another group health plan. HRA that allows current or former employees to spend down HRA balance even though no longer enrolled in major medical coverage. HRA plan design that allows current or former employees to elect major medical or HRA coverage on a separate, unbundled basis Pre-65 retiree HRA that can be used to pay premiums or reimburse 213 medical expenses regardless of whether employee is not enrolled in employer s major medical retiree coverage. 26

28 PREPARE FOR REPORTING OBLIGATIONS Due Dates Same as W-2 Individual reports for the calendar year due to employees by January 31 of following calendar year Master reports due to IRS by February 28 (March 31 if filing electronically) of following calendar year First reports due in 2016 for the 2015 calendar year 27

29 PENALTIES $100 Penalty for each form never filed or not corrected until after August 1 st $60 Penalty for every form filed or corrected more than 30 days after due date but before August 1st $30 Penalty for every form filed or corrected within 30 days of due date 4980H Penalties Inaccurate data on 1094C/1095C may lead to incorrect assessment of play or pay penalties 28

30 2015 PLAY OR PAY TO-DO LIST REPORTING/RECORDKEEPING ACTIVITIES (FORMS 1094-C/1095-C) For all Applicable Large Employers (both self-funded and fully-insured): For each calendar month: List of all employees employed even one day (Prep for 1094C/1095C) List of all Full-Time (FT) employees (1094C, Part III), 1095C) List of all employees in a limited non-assessment period (1095C, Part II) List of all employees who were offered Minimum Essential and/or Minimum Value coverage for the entire month and whether such coverage was offered to their spouses and dependents (1094C, Part II), (1095C, Part II) Cost of single coverage on lowest cost Minimum Value plan available to each employee (1094C, Part II), (1095C, Part II) List of all employees who enrolled in Minimum Essential Coverage (1094C, Part II), (1095C, Part II) List of employees who qualify for affordability safe harbor (optional) (1094C, Part II), (1095C, Part II) List of all employees to whom employer made contributions to a union plan that provides Minimum Value coverage to employee and dependents (1094C, Part II), (1095C, Part II) For Applicable Large Employers offering self-funded plans: For each calendar month: List of all employees and dependents enrolled in self-funded coverage for even one day during the month, including their names and social security numbers (1095C, Part III) 29

31 QUESTIONS / AFG RESOURCES Related Healthcare Reform webinars ( Fundamentals of Healthcare Reform (HC110W) Healthcare Reform 2015: Your benefit duties didn t end with open enrollment (HC160W) Strategic planning for medium employers I: Introduction to play or pay and the small group market (HC221W) Strategic planning for medium employers II: Look-back measurement (HC222W) Strategic planning for medium employers III: Form 1094C/1095C reporting (HC223W) Play or pay guide I: Look-back measurement (HC251W) Play or pay guide II: Offering coverage (HC252W) Play or pay guide III: Form 1094C/1095C reporting (HC253W) Ask Associated public sector (HC390W) Expert consulting and resources, including Play or Pay Implementation Guide & To-Do List

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