Glossary of Terminology

Similar documents
REVIEW OF THE REPORTING REQUIREMENTS UNDER CODE SECTIONS 6055 AND 6056

Larry Grudzien Attorney at Law

Needed Information for Reporting under Code Section 6056 for Applicable Large Employers ( ALE ) with Self-Insured Health Plans

IRS Q&A About Employer Information Reporting on Form 1094-C and Form 1095-C

Understanding the 1095-C Form

Health Care Reform Information Reporting (Code Sections 6055 and 6056) Forms and Instructions Issued! Mary Powell & Callan Carter March 4, 2015

Affordable Care Act Series 1 & 2 Codes Form 1095-C

Frequently Asked Questions and Answers on IRS Form 1095-C

The Affordable Care Act Part II Collection/Record Keeping and Government Filings

Mastering Forms 1095-C and 1094-C. Brought to you by Preferred Insurance and The DeChristopher Group May 20, 2015

Mandatory Affordable Care Act January 31, 2017 IRS Code Section 6056 Reporting: Forms 1094-C and 1095-C

Reporting Presented by: Greg Stancil, RHU, ChHC Director of Health Care Reform Scott Benefit Services

Determining Applicable Large Employer Status & Full-Time Equivalent Employees

Expanded Evolution ACA User Guide. Evolution. payrollexperts.com

Ready or Not: ACA Reporting Starts March 31 st!

Prelude Section 6055 MEC Reporting Section 6056 ALE Reporting Information Applicable to Both 6055 and 6056 The IRS Forms Takeaways Questions

ACA Employer Reporting Guide. A practical guide to understanding the ACA 1094 and 1095 employer reporting requirements

ACA Reporting Checklist for Self-Insured Employer Plan Sponsors

GUIDANCE FOR COMPLETING FORM 1095-C AND FORM 1094-C

Employer Reporting Guide for Large Employers and 6056 Reporting for Large Employers

Affordable Care Act Reporting Requirements

Health Care Reform (HCR): New Reporting Requirements. Agenda

Employer Shared Responsibility Glossary of Key Terms

ACA REPORTING WEBINAR QUESTIONS AND ANSWERS

Solutions for ACA Implementation. berrydunn.com GAIN CONTROL

Health Reform Update: Reporting Provisions

Demystifying the ACA 1095-C and 1094-C Forms

The Employer Shared Responsibility Under the Affordable Care Act

HEALTH CARE REFORM: EMPLOYER SHARED RESPONSIBILITY RULES

Employer Reporting of Health Coverage Code Sections 6055 & 6056

Pay or Play Employer Shared Responsibility Penalties

Shared Responsibility for Employers Regarding Health Coverage The Pay or Play Rules. Mary Powell & Brian Gilmore March 4, 2014

Health Care Reform Simplifying Reform - Issue date Feb. 14, 2014

ACA COMPLIANCE UPDATE: WHAT S NEXT? NEW IRS INFORMATION REPORTING REQUIREMENTS FOR EMPLOYERS. Presented By: Nanci N. Rogers

Compliance Alert. ACA Mandates Different Measures of Affordability

Sections 6055 and 6056: MEC and ALE Reporting to the IRS

2016 ACA Reporting: A Closer Look at the Final Forms and Instructions

Amending ACA Reporting Forms in the Era of Pay or Play Penalties

Non-Calendar Year Health Plans Delayed Effective Date Worksheet May 2015

Reference Guide for Part II of Form 1095-C:

IRS Issues Final Rules on Large Employer Reporting Requirements

IRS Reporting in 2018 What Employers Need to Know

ACA Update and Tackling the ACA s Reporting Requirements February 19, Presented by: Stacy H. Barrow Proskauer Rose LLP

ACA Reporting for Large Employers

ACA: W-2s, 45R and 4980H

Pay or Play Employer Shared Responsibility Penalties

ACA EMPLOYER REPORTING REQUIREMENTS

PPACA EMPLOYER REPORTING REQUIREMENTS. APRIL 21 ST, 2015 Presented By: Chris Szem Benecept Consultants

PCGenesis ACA Coding. GASBO Augusta, GA November 5, 2015

Affordable Care Act Reporting Requirements

Received Letter 226J Now What?

AFFORDABLE CARE ACT (ACA) INFORMATION REPORTING AND COMPLIANCE

19 th ANNUAL MAINE TAX FORUM Solutions for ACA Implementation

Health Care Reform. Preparing for the Coming Storm. Health Care Reform Fox Rothschild

Sentric. Common 1095-C Scenarios

ACA Reporting Requirements: Be Prepared for What s Next

ABD Office Hours. Health Care Reform Information Reporting

IRS Reporting Resource Guide

ACA Information Reporting

Non-Calendar Year Health Plans Delayed Effective Date Worksheet Lisa Klinger, J.D., & Susan Grassli, J.D.

HEALTH CARE REFORM: NAVIGATING THE REPORTING MAZE

Stay up-to-date with our compliance news!

2015 Heath Care Reform Compliance Overview

Summary of 6055 and 6056 Reporting Obligations

Decoding the Codes. Understanding the IRS Form 1095-C ACA Reporting Codes. hubemployeebenefits.com

This presentation provides general information regarding its subject and explicitly may not be construed as providing any individualized advice

Affordable Care Act: Are We There Yet? ASBO October 14, 2015

Affordable Care Act (ACA) Employer Health Coverage Reporting Requirements. Malcolm C. Slee, Esq. Groom Law Group December 9, 2015

ACA: THE EMPLOYER MANDATE

SHRM Meeting Health Care Reform: Considerations for 2014 / 2015

January 28, 2016 ACA 1094/1095 Reporting Details

Affordable Care Act Reporting Forms 1094 & February 2, 2016 Kathy D. Petrucci & Zachary Davis

Compliance Alert. Frequently Asked Questions about ACA Employer Health Coverage Reporting EPIC Webinar Follow-up

ACA REPORTING REQUIREMENTS QUESTIONS AND ANSWERS

BEST PRACTICES FOR EMPLOYEE BENEFIT PLAN COMPLIANCE

Mastering the ACA Part III

Pay or Play Penalty Transition Relief Provisions

QUESTIONS AND ANSWERS: NEW IRS REQUIREMENTS FOR EMPLOYERS

IRS Enforcement of Employer Mandate

Employer Shared Responsibility

Health Reform Update: Proposed Regulations on Employer Shared Responsibility

Navigating the Employer Mandate

5 Steps to Conquer the Affordable Care Act Employer Mandate. Prepared for Annual Government Contracting Seminar

HEALTH CARE REFORM IMPLEMENTATION EMPLOYER & INSURER REPORTING REQUIREMENTS

Health Care Reform UPDATE. A periodic publication about Health Care Reform December 2015 FEATURE STORY ALSO IN THIS ISSUE DISSECTING THE 1095-C FORMS

Employee Benefits After the Affordable Care Act

Affordable Care Act 2/7/2015. Employer Notice of State Insurance Exchanges and Premium Tax Credits

Reporting Requirements

Timeline. ASCIP ACA Reporting Diagnostics. ASCIP ACA Reporting Diagnostics May Debra Davis Area Vice President, Compliance Counsel

Agenda Item C.1 DISCUSSION /ACTION ITEM Meeting Date: June 17, 2014

Child coverage. Employers must offer coverage to full-time employees and their children under age 26, but not their spouses or domestic partners.

Washington Council. Legislative Alert. Treasury, IRS Release Notice of Proposed Rulemaking on Health Care Law s Employer Requirements !

Darcy L. Hitesman. MACA/MCHRMA Conference September 10, 2015 MACA/MCHRMA 9/10/15

Forms 1094 & 1095 Reporting

Treasury Releases Proposed Regulations for Health Care Law s Information Reporting Requirements for Employers, Insurers

IRS holds hearings on employer reporting requirements under health care reform

Operating Engineers Local 101 Health and Welfare Fund 6601 Winchester, Suite 250, Kansas City, Missouri

Health Care Reform Update

Documenting Method for Identifying Full-Time Employees

FREQUENTLY ASKED QUESTIONS (FAQ) ABOUT THE ACA:

Transcription:

Glossary of Terminology Form 1095C Form 1094C Individual Statement furnished by the ALE to both the IRS and Employee Company Statement furnished by the ALE to the IRS Administrative Period: It is a period after the end of a measurement period and before the beginning of the stability period associated with the measurement period during which the employer can perform administrative tasks, such as calculating the hours for the measurement period, determining eligibility for coverage, providing enrollment materials to eligible employees, and conducting open enrollment. Affordable Coverage: It is the employee s required contribution for self-only coverage that does not exceed 9.5 percent (as adjusted see note on page 6) of the employee s income from the employer. Aggregated ALE Group: It is the controlled group of ALEs under federal law. Companies could be in a controlled or affiliated service group if they have common owners, provide services for each other or work together to provide services to third parties. Aggregated Group Member: It is a member of the controlled group of employers. Applicable Large Employer (ALE): For a calendar year, it is an employer who employed (along with members of its controlled group) an average of at least 50 full-time employees (including full-time equivalent employees) on business days during the preceding calendar year. Authoritative Transmittal: It is the Form 1094-C that contains all aggregated ALE Group information. This means that Lines 20-22 of Part II, Part III and Part IV are completed. Section 6 ACA Glossary of Terminology 1

Employee: It includes anyone who is a common law employee. It does not include a sole proprietor, a partner in a partnership, an S corporation shareholder who owns at least 2-percent of the S corporation, a leased employee within the meaning of section 414(n) of the Code, or a worker that is a qualified real estate agent or direct seller. Federal Poverty Line: It is the annual dollar amount in the federal poverty guideline chart for a single-member household in any of the 48 contiguous states: $12,140 for 2018. Form W-2 Safe Harbor: It is the method that allows the ALE to use each employee s W-2 income (Box 1) from the current year to determine affordability. Full-time Employee: It is an employee who, for any month, works at least 30 hours per week - 130 hours of service in a calendar month is treated as the monthly equivalent of at least 30 hours of service per week. Full-time Equivalent Employee: A combination of employees, each of whom individually is not treated as a full-time employee because he or she is not employed on average at least 30 hours of service per week with an employer, but who, in combination, are counted as the equivalent of a full-time employee solely for purposes of determining whether the employer is an ALE. For rules on how to determine full-time equivalent employees, see Regulations section 54.4980H-2(c). Fully insured: It means benefits are provided under an insurance policy or contract. Initial Measurement Period: It is a measurement period of new employees. It begins on the new employee s hire date or the beginning of the month after the employee s hire date. Limited Non-Assessment Period: It is generally refers to a period during which an ALE member will not be subject to an employer shared responsibility penalty under Code Section 4980H for a full-time employee, even if the employee is not offered health coverage during that period. An employer will not be subject to a penalty under Code 4980H(a), and in certain cases Code 4980H(b), with respect to an employee in the following circumstances: the transition rule for an employer s first year as an applicable large employer; the application of Code 4980H for the three full calendar month period beginning with the first full calendar month in which an employee is first Section 6 ACA Glossary of Terminology 2

otherwise eligible for an offer of coverage under the monthly measurement method; the application of Code 4980H during the initial three full calendar months of employment for an employee reasonably expected to be a full-time employee at the start date, under the look-back measurement method; the application of Code 4980H during the initial measurement period to a new variable-hour employee, seasonal employee, or part-time employee determined to be employed on average at least 30 hours of service per week, under the lookback measurement method; the application of Code 4980H following an employee s change in employment status to a full-time employee during the initial measurement period, under the look-back measurement method; and the application of Code 4980H to the calendar month in which an employee s start date occurs on a day other than the first day of the calendar month. Lowest Cost Employee Required Contribution The Employee Required Contribution is the employee s share of the monthly cost for the lowest-cost self-only minimum essential coverage providing minimum value that is offered to the employee by the ALE Member. The employee share is the portion of the monthly cost that would be paid by the employee for self-only coverage. Measurement Period: It is the period of time the ALE uses to determine if a variable hour employee is fulltime. It can be a three to twelve month period. There is one measurement period for new employees and another measurement period for ongoing employees. Minimum Essential Coverage (MEC): Although various types of health coverage may qualify as minimum essential coverage, for Form 1095-C purposes, minimum essential coverage refers to health coverage under an eligible employer-sponsored plan. For more details on minimum essential coverage, see Minimum essential coverage in Pub. 974. Minimum Value Coverage (MV): It is the minimum essential coverage plan s share of total allowed cost of benefit that is at least 60 percent of such costs. 98% Offer Method: If an ALE provides MEC with MV to at least 98% of the ALE s full-time employees, the ALE does not have to complete Column (b) of Part lll of Form 1094-C. Offer of Coverage Indicator Codes: 1A. Qualifying Offer: Minimum essential coverage providing minimum value offered to full-time employee with Employee Required Contribution equal to or less than 9.5% (as Section 6 ACA Glossary of Terminology 3

adjusted) of mainland single federal poverty line and at least minimum essential coverage offered to spouse and dependent(s). This code may be used to report for specific months for which a Qualifying Offer was made, even if the employee did not receive a Qualifying Offer for all 12 months of the calendar year. However, an ALE Member may not use the Alternative Furnishing Method for an employee who did not receive a Qualifying Offer for all 12 calendar months. 1B. Minimum essential coverage providing minimum value offered to employee only. 1C. Minimum essential coverage providing minimum value offered to employee and at least minimum essential coverage offered to dependent(s) (not spouse). 1D. Minimum essential coverage providing minimum value offered to employee and at least minimum essential coverage offered to spouse (not dependent(s)). Do not use code 1D if the coverage for the spouse was offered conditionally. Instead use code 1J. 1E. Minimum essential coverage providing minimum value offered to employee and at least minimum essential coverage offered to dependent(s) and spouse. Do not use code 1E if the coverage for the spouse was offered conditionally. Instead use code 1K. 1F. Minimum essential coverage NOT providing minimum value offered to employee; employee and spouse or dependent(s); or employee, spouse and dependents. 1G. Offer of coverage for at least one month of the calendar year to an individual who was not an employee for any month of the calendar year or to an employee who was not a full-time employee for any month of the calendar year (which may include one or more months in which the individual was not an employee) and who enrolled in selfinsured coverage for one or more months of the calendar year. Note. Code 1G applies for the entire year or not at all. Therefore, if code 1G applies, an ALE Member must enter code 1G on line 14 in the All 12 Months column or in each separate monthly box (for all 12 months). 1H. No offer of coverage (employee not offered any health coverage or employee offered coverage that is not minimum essential coverage, which may include one or more months in which the individual was not an employee). 1I. Reserved. 1J. Minimum essential coverage providing minimum value offered to employee and at least minimum essential coverage conditionally offered to spouse; minimum essential coverage not offered to dependent(s). (See Conditional offer of spousal coverage, above, for an additional description of conditional offers.) 1K. Minimum essential coverage providing minimum value offered to employee; at least minimum essential coverage offered to dependents; and at least minimum essential coverage conditionally offered to spouse. (See Conditional offer of spousal coverage, above, for an additional description of conditional offers.) Section 6 ACA Glossary of Terminology 4

Ongoing Employee: It is an employee who has been employed for at least one complete standard measurement period. Part-Time Employee: It means an employee who is neither a full-time employee nor a variable hour employee. Rate of Pay Safe Harbor: To determine monthly affordability, an employer would (1) take the hourly rate of pay for each hourly employee who is eligible to participate in the health plan, (2) multiply that rate by 130 hours per month. Responsible Individual: For purposes of Form 1095-B, it may be the primary insured employee, former employee, parent, uniformed services sponsor or other person enrolling individuals in coverage. Seasonal Employee: It means an employee who is hired into a position for which the customary annual employment is six months or less. Safe Harbor Indicator Codes: 2A. Employee not employed during the month. Enter code 2A if the employee was not employed on any day of the calendar month. Do not use code 2A for a month if the individual was an employee of the ALE Member on any day of the calendar month. Do not use code 2A for the month during which an employee terminates employment with the ALE Member. 2B. Employee not a full-time employee. Enter code 2B if the employee is not a full-time employee for the month and did not enroll in minimum essential coverage, if offered for the month. Enter code 2B also if the employee is a full-time employee for the month and whose offer of coverage (or coverage if the employee was enrolled) ended before the last day of the month solely because the employee terminated employment during the month (so that the offer of coverage or coverage would have continued if the employee had not terminated employment during the month). 2C. Employee enrolled in health coverage offered. Enter code 2C for any month in which the employee enrolled for each day of the month in health coverage offered by the ALE Member, regardless of whether any other code in Code Series 2 might also apply (for example, the code for a section 4980H affordability safe harbor) except as provided below. Do not enter code 2C in line 16 for any month in which the multiemployer interim rule relief applies (enter code 2E). Do not enter code 2C in line 16 if code 1G is entered in line 14. Do not enter code 2C in line 16 for any month in which a terminated employee is enrolled in COBRA continuation coverage or other post- Section 6 ACA Glossary of Terminology 5

employment coverage (enter code 2A). Do not enter code 2C in line 16 for any month in which the employee enrolled in coverage that was not minimum essential coverage. 2D. Employee in a section 4980H(b) Limited Non-Assessment Period. Enter code 2D for any month during which an employee is in a section 4980H(b) Limited Non- Assessment Period. If an employee is in an initial measurement period, enter code 2D (employee in a section 4980H(b) Limited Non-Assessment Period) for the month, and not code 2B (employee not a full-time employee). For an employee in a section 4980H(b) Limited Non-Assessment Period for whom the ALE Member is also eligible for the multiemployer interim rule relief for the month, enter code 2E (multiemployer interim rule relief) and not code 2D (employee in a section 4980H(b) Limited Non-Assessment Period). 2E. Multiemployer interim rule relief. Enter code 2E for any month for which the multiemployer arrangement interim guidance applies for that employee, regardless of whether any other code in Code Series 2 (including code 2C) might also apply. This relief is described under Offer of Health Coverage in the Definitions section of these instructions. Note. Although ALE Members may use the section 4980H affordability safe harbors to determine affordability for purposes of the multiemployer arrangement interim guidance, an ALE Member eligible for the relief provided in the multiemployer arrangement interim guidance for a month for an employee should enter code 2E (multiemployer interim rule relief), and not codes 2F, 2G, or 2H (codes for section 4980H affordability safe harbors). 2F. Section 4980H affordability Form W-2 safe harbor. Enter code 2F if the ALE Member used the section 4980H Form W-2 safe harbor to determine affordability for purposes of section 4980H(b) for this employee for the year. If an ALE Member uses this safe harbor for an employee, it must be used for all months of the calendar year for which the employee is offered health coverage. 2G. Section 4980H affordability federal poverty line safe harbor. Enter code 2G if the ALE Member used the section 4980H federal poverty line safe harbor to determine affordability for purposes of section 4980H(b) for this employee for any month(s). 2H. Section 4980H affordability rate of pay safe harbor. Enter code 2H if the ALE Member used the section 4980H rate of pay safe harbor to determine affordability for purposes of section 4980H(b) for this employee for any month(s). Note. An affordability safe harbor code should not be entered on line 16 for any month that the ALE member did not offer minimum essential coverage to at least 95% of its full-time employees and their dependents (that is, any month for which the ALE member checked the No box on Form 1094-C, Part III, column (a)). For more information, see the instructions for Form 1094-C, Part III, column (a). 2I. Reserved. Note. References to 9.5% in the section 4980H affordability safe harbors and Qualifying Offer Method are applied based on the percentage as indexed for purposes of applying the affordability thresholds under section 36B (the premium tax credit). The percentage, as adjusted, is 9.56% for plan years beginning in 2015, and 9.66% for plan years Section 6 ACA Glossary of Terminology 6

beginning in 2016, and 9.69% for plan years beginning 2017, and 9.56 for plan years beginning 2018. Self-Insured or Self-Funded: Under Code 105(h)(6), a self-insured or self-funded health plan is a plan of an employer to reimburse employees for expenses referred to in Code 105(b), which cross-references expenses for medical care under Code 213(d)] for which reimbursement is not provided under a policy of accident and health insurance. Thus, a self-insured health plan is a type of accident or health plan that provides reimbursement for Code 213(d) medical expenses and that is not insured. Stability Period: It is the coverage period that follows, and is associated with, a particular measurement period Standard Measurement Period: It is a measurement period for ongoing employees. Qualifying Offer: It is an offer of minimum value coverage that provides employee-only coverage at a cost to the employee of no more than approximately $1,161 in 2018 (9.56 percent of the Federal Poverty Level), combined with an offer of coverage for the employee s family. Qualifying Offer Method: For employees who receive qualifying offers for all 12 months of the year, ALEs will need to report only the names, addresses, and tax ID numbers of those employees and the fact that they received a full year qualifying offer. The employer is not required to report monthly, employee specific information on these employees. Variable Hour Employee: An employee if, based on the facts and circumstances at the employee s start date, the ALE Member cannot determine whether the employee is reasonably expected to be employed on average at least 30 hours of service per week during the initial measurement period because the employee s hours are variable or otherwise uncertain. Legal Disclaimer The information contained herein is intended to be used as general guidance only. This does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax experts, finance/accounting staff, and/or legal counsel. Section 6 ACA Glossary of Terminology 7