Sentric Common 1095-C Scenarios
Introduction Mike Petrasek Customer Success Marketing Manager
Before We Begin A Disclaimer If you re unsure then talk to your accountant or benefits broker.
Agenda Resources Page Reminder The Forms Line 14 Line15 Line 16 Common Scenarios Appendix
ACA Resources Reminder
After This Training You should: Know the Difference Between the Form 1094-C & 1095-C Understand Series 1 and 2 Code Groups Better understand a few of the most common uses of those codes
ACA Training THE FORMS
The Forms: Filing Deadlines January 31, 2017 (Original) March 2, 2017 (Extension) 1095-C due to EE. If mailed, must be postmarked to that date. February 28, 2017 1094-C and 1095-C are due to the IRS if filing by paper. March 31, 2017 1094-C and 1095-C are due to the IRS if filing electronically.
The Forms
The Forms: 1094-C Part 1
The Forms: 1094-C Part 2
The Forms: 1094-C Part 4
The Forms: 1095-C
The Forms: 1095-C
It s All About the Offer
The Forms: 1095-C Line 15 Only complete if line 14 code is: 1B, 1C, 1D, 1E, 1J or 1K.
The Forms: 1095-C Line 14
The Forms: 1095-C Line 14 According to the IRS: Series 1 indicator codes specify the type of coverage, if any, offered to an employee, the employee s spouse, and the employee s dependents. There are 11 types of Series 1 indicator codes
The Forms: 1095-C Line 14 Series 1 Codes Company Made A Qualifying Offer 1A 1E 1C 1G 1K Company Didn t Make A Qualifying Offer 1B 1D 1F 1H 1J *Code 1I is no longer used.
1095-C Line 14: The Company Made A Qualifying Offer 1A 1C 1E 1G 1K MEC providing MV offered to full-time EE with contrib. equal to or less than 9.66% of mainland single federal poverty line and at least MEC offered to spouse and dependents. MEC providing MV offered to EE and at least MEC offered to dependents (not spouse). MEC providing MV offered to EE and at least MEC offered to dependents and spouse. Do not use 1E if offer to spouse was conditionally (1K). Offer of coverage to EE who was not full-time for any months and who enrolled in self-insured coverage for one or more months. MEC providing MV offered to employee; at least MEC offered to dependents; and at least MEC conditionally offered to spouse.
1095-C Line 14: No Qualifying Offer 1B 1D 1F 1H 1J MEC providing MV offered to EE only. MEC providing MV offered to EE and at least MEC offered to spouse but not dependents. Do not use 1D if the coverage for the spouse was offered conditionally (1J). MEC not providing MV was made to EE; EE and spouse or dependents, or EE, spouse and dependents. No offer of coverage to the EE or the offer was not MEC. MEC providing MV offered to employee and at least MEC conditionally offered to spouse; MEC not offered to dependent(s).
1095-C Line 14: No Qualifying Offer Acceptable reasons why these codes may be used include: If the employee was not employed during that month If the employee was still in their limited nonassessment period If the employee was not full time every month of the year
The Forms: 1095-C Line 16
What Does Safe Harbor Actually Mean? Offered Affordable Coverage But Goes to the Marketplace Anyhow
IRS Acceptable Safe Harbor Reasons The EE was not employed or was not full time; The EE enrolled in the MEC coverage offered; The EE was in a limited non-assessment period with respect to section 4980H; The ALE member met one of the section 4980H affordability safe harbors with respect to his employee; or The ALE member was eligible for multiemployer interim rule relief for this EE. There are 9 types of Series 2 indicator codes
The Forms: 1095-C Line 16 Series 2 Codes Clarify when an employee enrolled in coverage Provide valid reasons why your company did not offer coverage Show that your offer was affordable if employee declined coverage Indicate that the employee is part of a multiemployer agreement 2C 2A 2B 2D 2F 2G 2H 2E *Code 2I is no longer used.
1095-C Line 16: Code 2C One code to rule them all sort of.
1095-C Line 16 Provide valid reasons why your company did not offer coverage. 2A 2B 2D Employee was not employed during the month. Employee is not a full-time employee. *Should be used for the month of termination. Employee is in a limited non-assessment period.
1095-C Line 16 Show that your offer was affordable if employee declined coverage. 2F 2G 2H Section 4980H affordability Form W-2 safe harbor. Section 4980H affordability mainland federal poverty line (9.66% or $94.75) safe harbor. Section 4980H affordability rate of pay safe harbor.
Line 16 Codes Explained: Group 4 Indicate that the employee is part of a multi-employer agreement. 2E Multi-employer interim rule relief and should always be paired with code 1H from Line 14.
A Few Red Flags
Top 3 Red Flag Scenarios Anything other than a code 1A and 1E on line 14. Roughly 80% of your employees should have a 1A or 1E but if you see some other codes, you should probably check your data. Blank line 16. Errors when generating forms. Good data is key. The bulk of your work with the ACA is going to be fixing bad data. Hire dates, term dates, plan start and end dates, enrollment dates, etc.
Let s Look At a Few Examples
Example 1: Antonio Accepted Coverage Offered Plans: Plan A - $50/month Plan B - $150/month Plan C - $500/month Line 14 1A Line 15 Blank Line 16 2C
Example 2: Britney Declined Coverage Offered Plans: Plan A - $50/month Plan B - $150/month Plan C - $500/month Line 14 1A Line 15 Blank Line 16 2F W2 2G Federal Poverty Line 2H Rate of Pay
Example 3: Ron Started Mid-Year Offered Plans: Plan A - $100/month Plan B - $150/month Line 14 Line 15 Jan. April = 1H May Dec. = 1E Jan. April = Blank May Dec. = $100 Line 16 Jan. April = 2A May Dec. = 2C
Example 4: Jan Terminated Mid-Year Offered Plans: Plan A - $150/month Plan B - $250/month Line 14 Jan. June = 1E July Dec. = 1H Line 15 Jan. June = $150 July Dec. = Blank Line 16 Jan. June = 2C July = 2B August Dec. = 2A
Example 5: Michael Started Mid-Month (No Waiting) Offered Plans: Plan A- $150/month Plan B - $250/month Line 14 Jan. & Feb. = 1H March = 1H April Dec. = 1E Line 15 Jan. - March = Blank April - Dec. = $150 Line 16 Jan. & Feb. = 2A March = 2B April Dec. = 2C
Example 6: Dwight Limited Non-Assessment Period Offered Plans: Plan A - $90/month Plan B - $150/month Line 14 Jan. March = 1H April May = 1H June - Dec. = 1A Line 15 Jan. Dec. = Blank Line 16 Jan. March = 2A April & May = 2D June Dec. = 2C
Example 7: Doug Union Employee Offered Plans: Plan A - $75/month Plan B - $250/month Plan C - $750/month Line 14 1H Line 15 Blank Line 16 2E
ACA Training APPENDIX
Line 14 Codes: No Offer or Not Minimum Value START Does offer provide Minimum Essential Coverage (MEC)? NO YES Does offer provide Minimum Value (MV)? 1F NO No Offer of Minimum Essential Coverage (MEC) NO 1H FINISH
START Line 14 Codes: Assumes Offer Provides MEC and MV Is the offer considered Affordable: 9.5% of mainland FPL? YES Offered to EE, spouse and dependents? YES 1A NO NO YES Offered to EE only? YES The offer is not considered Affordable: 9.5% of mainland FPL? NO Offered to EE and dependents (not spouse)? NO YES 1B 1C FINISH Offered to EE and spouse (not dependents)? YES 1D NO Offered to spouse and dependents? YES 1E
START Line 14 Codes: New Codes for 2016 The offer is not considered Affordable: 9.5% of mainland FPL? YES Offered to EE, dependents and at least conditionally offered to spouse? NO Offered to EE and conditionally offered to spouse but not dependents? YES YES 1K 1J FINISH
Line 14 Codes: Self-Insured Employer with Non-FT EE A few notes regarding self-insured coverage: All employees who enroll in self-insured coverage must receive a Form 1095-C. This includes non-full-time employees per the below scenario. Employers are required to complete all three parts of the Form 1095-C only for those employees who enrolled in self-insured coverage. START EE is enrolled but was NOT full time (FT) for any month. YES Offer to EE not FT & enrolled in self-insured coverage for 1 or more months YES FINISH 1G
Line 16 Codes: Not Employed or Not Full-Time START Was the EE employed on ANY day of the month? NO 2A YES Was the EE full-time for the month? NO 2B FINISH NOT YET Was the EE in a limited nonassessment period*? YES 2D *A limited non-assessment period may include: an EEs initial measurement or associated administrative period, the first calendar month of employment or the period following a status change, among others. For a full list, review the IRS s Form 1095-C instructions.
START Line 16 Codes: Assumes Full-Time Employee for the month Is the EE enrolled in minimum essential coverage offered? YES 2C NO Is EE eligible for multi-employer interim relief rule? NO Was the W-2 safe harbor method used? NO Was the federal poverty line safe harbor method used? NO Was the rate of pay safe harbor method used? NO No codes apply YES YES YES YES YES 2E 2F 2G 2H Leave blank FINISH