2
Presented by:
Colleen Doherty, SPHR
Tony Murphy
SVP, Compliance & Client Services
Eastern Benefits Group
cdoherty@easternbenefitsgroup.com
508-923-2442
SVP, Sales
Eastern Benefits Group
tmurphy@easternbenefitsgroup.com
781-581-4212
What do I need to know
about 6055 & 6056
reporting?
So now what do I do?
Do I need “a system”?
What are my options?
3
WARNING!!
4
5
You might be tempted…
6
Or maybe event take a little nap…
But
Don’t!
This stuff is really important!
7
We’ve got an app for that!
EBG Anti-Nap App
Show of hands…
10
INTERNAL REVENUE
SERVICE CODE
SECTIONS 6055 & 6056
11
• Applies to all health plan
issuers (health insurance
carriers) & self-insured
health plans
• Applies to all ALEs
• Employers must report cost,
coverage (MEC and Minimum
Value - MV) & eligibility info for
all Full Time Employees
• Tells the IRS which individuals
have minimum essential
coverage (MEC)
• Required to administer the
Individual Mandate
• Separate statements for each
Full Time employee
• Required to administer the
Employer Mandate
12
Minimum Value (MV) Plans
Minimum Essential Coverage (MEC)
Minimum Value (MV) Plan
Health plan is expected to pay out
on average at least 60% of claims.
Minimum Essential Coverage
(MEC)
Virtually any health insurance plan
that does not consist solely of
“excepted benefits”. Does not need
to provide minimum value (MV).
13
5 Reporting Forms Released
1095-A
1094-B
1094-C
Health Insurance
Marketplace Statement
Transmittal of Health
Coverage Information
Returns
To be used by state and
federal Exchanges only.
1095-B
Transmittal of EmployerProvided Health
Insurance Offer and
Coverage Information
Returns
Health Coverage
1095-C
To be used by “issuers”.
Health insurance carriers
and self insured health
plans that are NOT ALEs.
Employer-Provided Health
Insurance Offer and
Coverage
To be used by all ALEs
14
We have final instructions & forms for 2014
15
The Forms 1095-C & 1094-C
16
6055 & 6056 Reporting
• 6055 & 6056 combined reporting for ALES with self-insured plans
• Insurance carriers will do 6055 reporting for fully
insured plans (EEs will get 2 statements)
• There is no “transition relief” for reporting purposes
• Reporting based on full calendar year
17
6055 & 6056
Paper or Electronic Reporting to IRS
Smaller Employers Only
(<250 returns)
Required for Larger Employers (250+ returns)
Optional for Smaller Employers
18
Reporting Due Dates
• Reporting Period is 1/1/2015 – 12/31/2015
• All EE reports are due to EEs by 1/31/2016
• All employer reports are due to the IRS:
• End of February 2016 – if you file manually/paper
• End of March 2016 for all other ALEs (including smaller employers
that choose to file electronically)
19
Before we get to the forms…
Let’s take a brief look at…
20
EMPLOYER SHARED
RESPONSIBILITY (ESR)
ASSESSMENTS
AKA – Pay or Play Penalties
21
Employer Shared Responsibility Assessments
(AKA – Pay or Play Penalties)
Non-Providing Employer
Assessment
Providing Employer
Assessment
• ALEs
• ALEs
• MEC
• MV (60% actuarial value)
• 95% of FT EEs
(70% 2015)
• Affordable (9.5% )
• $166.67/mo. ($2k annualized)
• $250/mo. ($3k annualized)
• All ACA FT EEs
• Each ACA FT EE
(30 hours/week)
• Minus first 80 2015 / Minus first 30 2016+
that receives
subsidized Exchange Coverage
At least one FT employee must obtain coverage via Exchange / Marketplace –
and receive premium tax sharing or cost sharing subsidies in order to trigger either penalty.
Penalties are non tax deductible. Gross up by your tax rate.
22
Penalty Amounts Are Subject To Indexing
There is no actual 2014 Penalty.
2014 4980H A Penalty
2014 4980H B Penalty
$2,000 / 12 = $166.67 monthly
$3,000 / 12 = $250.00 monthly
2015 Penalty Amounts Based on Indexing? Not released by IRS yet.
Waiver Forms Are Crucial
To Avoid “A” Penalties!
24
TRANSITION RELIEF
Delayed Penalty Assessments – for Some ALEs
But not delayed reporting!
25
Transition Relief From Penalty Start Date of
January 1, 2015 – For Some Employers
Medium Size Employers*
B. Non-Calendar Year Plans*
C. Individual Employees*
A.
* But…
only if transition
relief conditions
are met.
26
ESR Assessment Transition Relief for
Medium Size Employers (50-99) 2015
Employer may qualify for relief from potential penalty assessments in
2015 if…
Limited Workforce Size
Using the same rules to determine ALE status – employer has at least 50 but fewer than 100
employees (including full time equivalent employees) on business days during 2014.
Maintenance of Workforce and Aggregate Hours of Service
During the period beginning on February 9, 2014, and ending on December 31, 2014, the
employer does not reduce the size of its workforce or the overall hours of service of its
employees in order to satisfy the workforce size condition (50 to 99 employees).
Maintenance of Previously Offered Health Coverage
During the coverage maintenance period the employer does not eliminate or materially reduce
the health coverage or employer contribution, if any, it offered as of February 9, 2014. The
“coverage maintenance period” means the period beginning on February 9, 2014, and ending
on the last day of the plan year that begins in 2015.
Certification of Eligibility for Transition Relief
Must certify on IRS Form 1094-C that it meets the eligibility requirements listed above.
27
ESR Assessment Transition Relief for
Non-Calendar Year Plans
All Employees Test
• The non-calendar year plan(s) covered
at least one-quarter of the large
employer’s employees as of any date
in the 12 months ending on Feb. 9,
2014; or
• At least one-third of the large
employer’s employees were offered
coverage under the non-calendar year
plan(s) during the most recent open
enrollment period before Feb. 9, 2014.
OR
ACA Full Time Employees Test
• The non-calendar year plan(s) covered
at least one-third of the large
employer’s full-time employees as of
any date in the 12 months ending on
Feb. 9, 2014; or
• At least one-half of the large
employer’s full-time employees were
offered coverage under the noncalendar year plan or plans during the
most recent open enrollment period
before Feb. 9, 2014.
If your plan meets either of these condition tests – ESR assessments will not
begin until the start of your plan year – rather than 1/1.
Note – plan year means your 5500 filing plan year.
28
An easier way to look at this…
Non-Calendar Year Transition Relief
Did you…?
All Employees
Full Time Employees
1/4
1/3
1/3
1/2
Cover:
as of any date in the 12
months prior to
Feb. 9, 2014
Offer to:
during the most recent
open enrollment period
before Feb. 9, 2014.
29
ESR Assessment Transition Relief for
Individual Employees
Based on Pre 2015 Eligibility Rules
• For Non Calendar Year Plans (aka Fiscal Year Plans)
• Regardless of hire date
• Would the employee have been eligible for coverage based on your
plan eligibility rules that were in effect on February 9, 2014?
• If so, transition relief applies for that employee
• Assessments, if any, would begin as of plan year date for that specific
employee.
30
Affordable & Minimum Value
In addition to the rules previously discussed…
In order to take advantage of transitional relief for a delay in
any applicable penalties – the coverage offered as of the
first day of the plan year in 2015 must be both affordable
and meet minimum value requirements.
Affordable:
Meets one of 3 possible EE
affordability Safe Harbors: W-2,
Rate of Pay or FPL
Minimum Value
Plan expected to pay out at least
60% of claim costs incurred
31
You must know
how to accurately
identify your ACA
full time
employees!
FT = 130 per
month
(30 hours per week on
average)
Variable Hour
Employees!!
YOU NEED TO KNOW WHO YOUR
ACA FULL TIME EMPLOYEES ARE
Seasonal, Part Time, Per Diem, Variable Hour, Temporary…
Look Back Measurement Periods
In order to accurately file with the IRS – you need to properly identify
who your FT employees are. You also need to know this for your own
ESR assessment planning purposes.
Be sure to carefully look at
All Non-Eligible Employees
• All employers should especially careful to verify ACA full
time status for employees that are not offered eligibility in
the employer sponsored health plan.
Failure to offer
coverage to an
employee that
should be deemed
full time under the
ACA can result in
large penalties for an
employer!
Measurement Periods
(Initial & Standard)
Initial Periods
Strictly for newly hired employees
when an employer cannot
reasonably determine full time status
at date of hire (i.e., seasonal &
variable hour ee’s).
• Initial Look Back /
Measurement Period
• Initial Administrative
Period
• Initial Stability Period
New Hires
Standard Periods
For “Ongoing Employees”
• Standard Look Back /
Measurement Period
• Standard
Administrative Period
• Standard Stability
Period
All Ongoing Employees
Measurement (aka Look Back) Period
Under the look-back period safe harbor method, an employer will
determine each employee’s full-time status by looking back at a defined
period of not less than 3 but not more than 12 consecutive
calendar months, as chosen by the employer to determine whether
during the measurement period the employee averaged at least 30
hours of service per week.
Test & Plan For Look Back Periods
Bill Field's Seaside Bar & Grill
January 1 - March 31
April 1 - June 30
July 1 - September 30
October 1 - December 31
First Name 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52
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3
Mo.
Avg.
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Mo.
Avg.
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26.9
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Mo.
Avg.
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Mo.
Avg.
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26.2
23.5
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26.2
Anton
Lenny
Meaghan
Germaine
Tyree
Darin
Jade
Jasper
Kraig
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Antione
28 21 21 28 28 21 35 35 35 35 28 28 35 35 35 35 28 28 28 35 21 28 40 40 40 40 40 40 40 40 40 40 40 40 40 28 28 28 28 28 21 21 21 21 21 21 21 21 21 21 21 21 21.6 28.9 30.4 30.1
Dorian
Nikolas
Randal
20 24 28 35 35 35 20 20 35 35 35 20 20 0 0 20 20 20 20 20 20 20 40 40 40 40 40 40 40 40 40 40 40 40 40 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 26.9 25.6 26.2
56 40 16 16 16 16 16 16 0 16 16 16 16 32 32 16 16 16 16 16 16 16 40 40 40 40 40 40 40 40 40 40 40 40 40 20 20 20 20 16 16 16 16 16 16 16 16 16 16 32 40 56 19.3 28 27.3 25.4
56 40 16 16 16 16 16 16 0 16 16 16 16 32 32 16 16 16 16 16 16 16 40 40 40 40 40 40 40 40 40 40 40 40 40 20 20 20 20 16 16 16 16 16 16 16 16 16 16 16 16 56 16 26.5 26.3 24.6
Sebastian
20 24 28 35 35 35 20 20 35 35 35 20 20 0 0 20 20 20 20 20 20 20 40 40 40 40 40 40 40 40 40 40 40 40 40 20 20 20 20 32 32 32 32 32 32 32 20 20 20 20 20 20 27 30.2 27.8 27.8
Variable Hour Can Be Tricky
• You have to measure to know…
Tuesday, April 01, 2014
First Name
4/01
4/08
4/15
4/22
-
4/29
5/06
5/13
Tuesday, June 24, 2014
5/20
5/27
6/03
6/10
6/17
6/24
Avg. Hrs.
Joe
29
Bill
15
Bob
30
30
25
25
25
25
30
28
28
32
32
32
32
28.7
22
20
18
15
15
22
22
22
15
22
45
45
22.9
45
25
32
35
25
30
35
25
25
35
25
25
• Managers may need to manage hours better to protect
the employer from possible penalties.
30.2
An Employer Must Consider…
• Working Hours: Each hour for which the employee is paid, or entitled
to payment, for the performance of duties for the employer; and
• Non-working Hours: Each hour for which an employee is paid, or
entitled to payment, by the employer on account of a period of time
during which no duties are performed due to vacation, holiday, illness,
incapacity (including disability), layoff, jury duty, military leave or leave
of absence.
Think of this as hours worked – and / or paid when
determining eligibility in the measurement period.
Rehired Employees and
Employees Returning from Leave
For an employee who is treated as a continuing employee, the
measurement and stability periods that would have applied to the
employee had he or she not experienced the break in service would
continue to apply upon the employee’s resumption of service.
Rule of Parity for Rehires & EEs returning from leave
• EEs with breaks of 13+ weeks can be treated as new
• Except teachers = 26 weeks before can treat as new
• EEs with breaks of <13 weeks - may use “Rule of Parity”
“Special Unpaid Leave”
FMLA Leave, USERRA Leave and Jury Duty
Under the averaging method, the employer either:
• Determines the average hours of service per week for the
employee during the measurement period excluding the special
unpaid leave period and uses that average as the average for the
entire measurement period; or
• Treats employees as credited with hours of service for special
unpaid leave at a rate equal to the average weekly rate at which
the employee was credited with hours of service during the
weeks in the measurement period that are not special unpaid
leave.
Your tracking system must have a way to account for
these types of unpaid / non-working hours!
Note on “Seasonal”
Seasonal Worker vs. Seasonal Employee
Terminology:
• The term Seasonal Workers is used for determining ALE
status.
• The term Seasonal Employees is used for FT Employee
status during the look back period.
• An employee who is hired into a position for which the customary
annual employment is six months or less. The period of employment
should begin each calendar year in approximately the same part of the
year, such as summer or winter. In certain unusual instances, the
employee can still be considered a seasonal employee even if the
seasonal employment is extended in a particular year beyond its
customary duration (regardless of whether the customary duration is
six months or is less than six months). ACA Seasonal employees do
not subject an employer to ESR assessments.
Administrative & Stability Periods
Administrative Periods
• Up to 3 Months following MP to determine FT status and make offer
of coverage
• Only 1 Month Admin Period allowed if using 12 Month Measurement
Period.
Stability Periods
• Follows measurement and admin period
• Period during which EE is eligible for coverage
• Must be at least 6 Months long and match your measurement period.
• Employers choosing measurement periods of less than 6 months
would still have to offer a stability period of 6 months.
Measurement Period Examples
6-3-6
6 Month Look Back Measurement Period
3 Month Administrative Period
6 Month Stability Period
2014
J
F
M
A
M
J
J
2015
A
S
O
N
D
J
F
M
A
M
J
J
2016
A
S
O
N
D
J
F
M
A
M
J
J
2017
A
Admin
Stability
Measurement
Admin
Stability
Next MP starts on 1/1/15
Measurement
Admin
Stability
Next MP starts on 7/1/15
Measurement
Admin
Next MP starts on 1/1/16
Ex: start MP on 7/1/14
S
O
N
D
J
Measurement
Non-Calendar Year Example
Stability
F
M
Measurement Period Examples
6-2-6 (6 month look back period, 2 month admin period, 6 month stability period)
2014
J
F
M
A
M
J
J
2015
A
S
O
N
D
J
F
M
A
M
J
J
2016
A
S
O
N
D
J
F
M
A
M
J
J
2017
A
S
O
Admin
Stability
Measurement
Admin
Stability
Next MP starts on 1/1/2015
Measurement
Admin
Stability
Next MP starts on 7/1/2015
Measurement
Admin
Next MP starts on 1/1/2016
N
D
J
F
M
Measurement
Ex: start MP on 7/1/14
Stability
6-1-6 (6 month look back period, 1 month admin period, 6 month stability period)
2014
J
F
M
A
M
J
J
Ex: start MP on 7/1/14
2015
A
S
O
N
D
Measurement
J
A
Next MP starts on 1/1/15
F
M
A
M
J
J
Stability
Measurement
A
Next MP starts on 7/1/15
2016
A
S
O
N
D
Stability
Measurement
Next MP starts on 1/1/16
J
A
F
M
A
M
Stability
Measurement
Non-Calendar Year Example
J
J
A
2017
A
S
O
N
Stability
D
J
F
M
Measurement Period Examples
12-1-12
12 Month Look Back Measurement Period
1 Month Administrative Period
12 Month Stability Period
2014
J
F
M
A
M
J
J
2015
A
S
O
N
D
Measurement
Next MP starts 1/1/15
J
A
F
M
A
M
J
J
2016
A
Stability
Measurement
S
O
N
D
J
F
M
A
A
M
J
J
2017
A
S
O
N
Stability
Non-Calendar Year Example
The ACA has a rule that says a FT EE cannot wait more than
13 months to be offered coverage. So an employer using a
12 Month Measurement Period – could NOT use a 3 Month
Administrative Period.
D
J
F
M
Measurement Period Examples
3-3-6
Measurement Periods of less than 6 months are generally not
recommended due to administrative burden and complexity.
2014
J
F
M
A
M
J
J
2015
A
Meas
EBG typically
recommends
6 or 12 Month
measurement
periods.
S
O
N
D
Admin
Meas
J
F
M
A
M
J
J
2016
A
S
O
N
D
J
F
M
A
M
J
J
Stability
Admin
Stability
Meas
Admin
Stability
Meas
Admin
Stability
Meas
Admin
Stability
Meas
Admin
Stability
Meas
Admin
A
S
O
Stability
N
D
Start with your Admin Period
& Work Backwards
• Employer chooses to use a 6 Month Measurement Period
and a 3 Month Administrative Period.
• Employer has a 7/1 plan renewal date
2014
J
F
M
A
M
J
J
Measurement
2015
A
S
O
N
D
J
F
Admin
Stability
Measurement
M
A
M
J
J
2016
A
Admin
Stability
Measurement
S
O
N
D
J
F
Admin
Stability
Measurement
M
A
M
Admin
J
J
2017
A
S
O
N
D
Stability
Recommended
J
F
M
Measurement Periods - NOW
Employers need to
look at 2014 hours in
order to determine
2015 Full Time Status.
Look Back Transition Relief
Employers that intend to utilize the look-back
measurement method for determining full-time
status for 2015 will need to begin their
measurement periods in 2014 to have
corresponding stability periods in 2015.
The IRS recognizes that employers that intend
to adopt a 12-month measurement period and a
12-month stability period will face time
constraints.
Special Rule…
Solely for purposes of stability periods beginning in 2015,
employers may adopt a shorter transition measurement
period that:
• Is less than 12 months, but not less than 6 months long; and
• Begins no later than July 1, 2014, and ends no earlier than 90 days
before the first day of the first plan year beginning on or after Jan. 1,
2015.
This will be helpful to employers with non-calendar year plans that wish
to use a 12 Month Measurement Period.
Or, for a calendar year with no administrative period.
51
NOW LET’S GET TO
THE FORMS
52
1095-C
Part I
Lines 1 – 13
Basic Employer &
Employee Information
Part II (6056 Info)
Lines 14 – 16
Offer, Coverage & Cost
Information
Part III (6055 Info)
Lines 17 – 22
Covered Individuals
Information (Part III is for
self-insured plans only)
Goes to each person that was employed as FT for at
least 1 month during the calendar year.
Self-Insured ALEs also have to report on ANYONE
covered under the plan during the year.
53
54
1095-C – Part I
Basic Info
55
1095-C Part II
3 Questions – 2 sets of “Indicator Codes”
Data will likely be different for many employees.
56
Let’s Look At Each Part II Question
Question #14:
Offer of Coverage (enter required code)
You must enter one of 9 possible codes for each month of
the year.
You may enter 1 code in the “All 12 Months” box if the code
is the same for all 12 months of the year.
57
9 Possible Codes for Line 14 (1A – 1I)
1. 1A. Qualifying Offer: Minimum essential coverage providing minimum value offered to full-time
2.
3.
4.
5.
6.
7.
8.
9.
employee with employee contribution for self-only coverage equal to or less than 9.5%mainland
single federal poverty line and at least minimum essential coverage offered to spouse and
dependent(s).
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)).
1E. Minimum essential coverage providing minimum value offered to employee and at least
minimum essential coverage offered to dependent(s) and spouse.
1F. Minimum essential coverage NOT providing minimum value offered to employee, or employee
and spouse or dependent(s), or employee, spouse and dependents.
1G. Offer of coverage to employee who was not a full-time employee for any month of the calendar
year and who enrolled in self-insured coverage for one or more months of the calendar year.
1H. No offer of coverage (employee not offered any health coverage or employee offered coverage
that is not minimum essential coverage).
1I. Qualifying Offer Transition Relief 2015: Employee (and spouse or dependents) received no offer
of coverage, received an offer that is not a qualifying offer, or received a qualifying offer for less than
12 months.
58
1A – Qualifying Offer
Minimum essential coverage providing minimum value
offered to full-time employee with employee contribution for
self-only coverage equal to or less than 9.5%mainland
single federal poverty line (FPL) and at least minimum
essential coverage offered to spouse and dependent(s).
In order to meet the mainland FPL affordability test the
employee’s monthly cost of coverage for the
employer’s lowest cost MV/MEC plan can be no more
than $93.17 per month in 2015.
59
1B, 1C & 1D
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)).
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1E – MV/MEC Offer of Coverage
Minimum essential coverage providing minimum value
offered to employee and at least minimum essential
coverage offered to dependent(s) and spouse.
For most employers that offer coverage – this will be
the most common code used.
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1F, 1G & 1H
1F. Minimum essential
coverage NOT
providing minimum
value offered to
employee, or
employee and spouse
or dependent(s), or
employee, spouse and
dependents
1G. Offer of coverage
to employee who was
not a full-time
employee for any
month of the calendar
year and who enrolled
in self-insured
coverage for one or
more months of the
calendar year.
(Example: COBRA or
PT eligible EE)
1H. No offer of
coverage (employee
not offered any health
coverage or employee
offered coverage that
is not minimum
essential coverage).
This code may be
used often –
especially during a
new FT EE’s waiting
period and first year
of employment.
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1I – Qualifying Offer Trans. Relief
1I. Qualifying Offer Transition Relief 2015: Employee (and
spouse or dependents) received no offer of coverage,
received an offer that is not a qualifying offer, or received a
qualifying offer for less than 12 months.
We’ll cover this a bit later in the program.
Not likely to be used by many employers.
63
Let’s Look At Each Part II Question
Question #15:
Employee Share of Lowest Cost Monthly premium for
Self-Only Minimum Value Coverage
You may enter 1 amount in the “All 12 Months” box if the
EE cost is the same for all 12 months of the year.
Leave blank for months in which no offer of coverage is
made.
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Let’s Look At Each Part II Question
Question #16:
Applicable Section 4980H Safe Harbor
(enter code if applicable)
You may enter one of 9 possible codes for each month of the
year – only if applicable.
You may enter 1 code in the “All 12 Months” box if the code is
the same for all 12 months of the year.
Leave blank if no safe harbor code applies.
65
9 Possible Codes for Line 16 (2A – 2I)
1. 2A. Employee not employed during the month.
2. 2B. Employee not a full-time employee.
3. 2C. Employee enrolled in coverage offered. *
4. 2D. Employee in a section 4980H(b) Limited Non-Assessment Period.
5. 2E. Multiemployer interim rule relief. *
6. 2F. Section 4980H affordability Form W-2 safe harbor.
7. 2G. Section 4980H affordability federal poverty line safe harbor.
8. 2H. Section 4980H affordability rate of pay safe harbor.
9. 2I. Non-calendar year transition relief applies to this employee.
* Takes precedence over other applicable codes.
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Q #16: Ordering Rules
It is possible that more than one rule is applicable. The IRS
has issued “
” to tell us which code should
take precedent over another.
2C
2E
Employee enrolled in coverage
offered. Even if other safe
harbors apply during that month –
if the EE is enrolled in the
employer’s plan – use 2C.
Multiemployer interim rule relief.
If the employee is covered under
a collective bargaining agreement
and the employer contributes to a
multiemployer plan – use 2E.
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Part III – Self Insured Employers Only
Covered Individuals (Dependents)
• 1095-C Part III is for employers with self insured coverage only!
• Need to add info for any covered dependents.
• Name, SSN & Months Covered.
(If SSN is not available a DOB may be used after
at least 1 initial + 2 documented attempts to get the SSN.)
Now you’re done with the employee’s 1095-C!
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LET’S LOOK AT SOME
COMPLETED SAMPLE
FORMS 1095-C
69
John has been an executive at XYZ Co. for 5 years.
He makes a very good salary. His plan is affordable
based on his salary. He covers himself and his
dependents for the entire calendar year.
SIMPLE – PLAIN VANILLA
70
IF XYZ Co. had a fully insured
group health plan – Part III
would be left blank.
71
1E – Employee was
offered coverage for the
EE Costentire
for Self
year
Only Coverage
Lowest MV/MEC
2C – EE enrolled in plan
for entire year
Self-Insured Plan
Dependents
Covered
72
George is a full time college student . He works 30 hours
per week (nights/weekends) at XYZ Co. He earns $9 per
hour and was hired on March 15, 2015. He’s eligible for
XYZ’s insurance but opts not to take it. The insurance is
not affordable to him based on his earnings. No
affordability safe harbors apply.
A LITTLE MORE COMPLEX
73
74
1H – Employee was hired on
3/15/2015 and was NOT offered
coverage until 1st of month
following 60 days after DOH (6/1)
1E – EE and dependents (if
any) offered coverage on June
1 after EE completes waiting
period.
EE Cost for Self-Only coverage
inserted only in months where
coverage was offered.
2A - Employee not employed
during the month
2D - Employee in a section
4980H(b) Limited NonBlank - EE Period.
did not enroll in
Assessment
coverage and there are no
affordability safe harbors
because EE makes $9/hr.
75
Homer belongs to the Local 123 (union). He started to
work at Springfield Nuclear on 7/1/2015. Homer is eligible
for – and participates in – Local 123’s multiemployer
health plan. Springfield Nuclear is required to contribute
towards the cost of Homer’s coverage under a collective
bargaining agreement. (Springfield offers a fully insured group
health plan to its other non-union employees.)
UNION EMPLOYEE COVERED
BY A MULTIEMPLOYER PLAN
76
77
1H. No offer of coverage (employee
not offered any health coverage or
employee offered coverage that is not
minimum essential coverage).
2A. Employee not employed during
the month.
1E. Minimum essential coverage
providing minimum value offered to
employee and at least minimum
essential coverage offered to
dependent(s) and spouse.
2E. Multiemployer interim rule relief.
78
Multiemployer Plans (Unions)
Important Note
If an employer contributes to a multiemployer plan as part of a
collective bargaining agreement for a FT employee:
The multiemployer plan administrator will be responsible for
6055 reporting via Form 1095-B. The employer must still file
Form 1095-C and complete Parts I & II only for the employee
The employer may claim to make an offer of coverage and
use Code 2E provided that:
• the multiemployer plan offers dependent coverage;
• the multiemployer plan provides minimum value coverage; and
• the coverage is affordable.
79
In order for an employer to use
Code 2E for union employees…
The employer must have
certification from the
multiemployer plan administrator
that its plan meets:
MEC
MV
Covers Dependents
Is Affordable
80
Transmittal
Form
1094-C
The ALE “Transmittal Form” for 1095-C
81
1094-C Transmittal Form – 3 pages
82
83
84
85
NOW LET’S TRY
COMPLETING THE 1094-C
The transmittal form
86
350
Mary H.R. Executive
January 28, 2016
87
Q: 22 – Certifications of Eligibility
Qualifying Offer
Method
Qualifying Offer
Transition Relief
Section 4980(H)
Transition Relief
98% Offer Method
(Codes A & B if applicable)
88
Alternative Methods
Questionable Convenience?
RARE BIRD
REPORTING BASED ON CERTIFICATION OF QUALIFYING OFFERS
Applies with respect to an ALE that certifies on its transmittal form that it offered certain coverage (a qualifying
offer) to one or more of its full-time employees. A “qualifying offer” occurs when, for all months during the year in which
the employee was a full-time employee with respect to whom an employer shared responsibility penalty could apply, the ALE:

Offers MEC providing minimum value at an employee cost for self-only coverage of less than 9.5 percent of the mainland
single federal poverty line to one or more of its full-time employees; and

Offers MEC to the employee’s spouses and dependents.
For employees who received a qualifying offer for all 12 months of the calendar year, the ALE will be treated as complying with
Section 6056 if it takes the following two steps:
1.
Report simplified Section 6056 return information with respect to those employees. The ALE will file Form 1095C with the IRS, providing only the employee’s name, SSN and address, and indicating (using the Qualifying Offer code 1A)
that a qualifying offer was made for all 12 months of the calendar year. The ALE also will not report the dollar amount for
any month for the employee’s share of the lowest cost monthly premium for self-only coverage providing minimum value
offered to that employee. An employer may not, for any month, use code 1A and also report this dollar amount.
2.
Provide a simplified employee statement in lieu of a copy of the Form 1095-C to each full-time employee who
received a qualifying offer for all 12 months. This statement must include the employer’s name, address and EIN, and
must inform the employee that the employee (and his or her spouse and dependents, if any) received a qualifying offer
for all 12 months of the calendar year, and therefore are generally ineligible for a premium tax credit for all of those 12
months. In addition, this statement must direct the employee to see IRS Publication 974, Premium Tax Credit (PTC)
(currently in draft form), for more information on eligibility for the premium tax credit.
However, an employer may not provide a simplified employee statement in lieu of a copy of the Form 1095-C for
any full-time employee who enrolled in self-insured coverage, regardless of whether the employee received a qualifying
offer for all 12 months. The employer must furnish the information reporting enrollment in the self-insured coverage reported
on Form 1095-C, Part III. For these employees, the employer may furnish a copy of Form 1095-C as filed with the IRS (with or
without the statement described above).
For each employee who received a qualifying offer for fewer than 12 months, the ALE will use the general reporting
method. However, the ALE may use code 1A to report for months in which a qualifying offer was received.
QUALIFYING OFFER METHOD TRANSITION RELIEF FOR 2015
The final rule also includes transition relief in 2015 for ALEs that certify on the transmittal that they have made a
qualifying offer to at least 95 percent of their full-time employees (and their spouses and dependents).
Generally, employers will have to use the general method of reporting for any employees that did not receive a
qualifying offer for all 12 months. However, solely for 2015, ALEs that have made a qualifying offer to at least 95
percent of their full-time employees (and their spouses and dependents) will be treated as complying with Section
6056 if they take the two simplified steps listed above. However, in this case, employers will use either:

The Qualifying Offer code 1A for any months for which the employee received a qualifying offer; or

The Qualifying Offer Method Transition Relief code 1I for any months for which the employee did not
receive a qualifying offer.
An employer may not, for any month, use code 1A or code 1I and also report the dollar amount for the employee’s
share of the lowest cost monthly premium for self-only coverage providing minimum value.
In addition, the simplified employee statement will vary based on whether the employee received a qualifying offer
for all, some or no months of the calendar year.

If the qualifying offer applied to an employee for all 12 months of the calendar year, the statement will inform
the employee that the employee (and the employee’s spouse and dependents, if any) will not be eligible to
claim a premium tax credit for any of the 12 calendar months.

If the qualifying offer did not apply to an employee for all 12 months, the statement will inform the employee
that the employee (and his or her spouse and dependents) may be eligible to claim a premium tax credit for
one or more of the 12 calendar months. The statement must also include a name and telephone number that
the employee can contact for further information regarding the offer of coverage.
REPORTING BASED ON CERTIFICATION OF 98 PERCENT OFFERS
91
This alternative method applies with respect to an ALE that certifies on its transmittal form that it:

Offered MEC that is affordable and provides minimum value to at least 98 percent of its full-time
employees on whom it reports in its Section 6056 return; and

Offered MEC to those employees’ dependents.
For this purpose, coverage is treated as affordable if the cost of employee-only coverage satisfies any applicable
affordability safe harbor under the employer shared responsibility final regulations.
This alternative method allows eligible ALEs to provide Section 6056 reporting without determining
whether each employee offered coverage is a full-time employee or specifying the number of the
employer’s full-time employees. Under this alternative method, the employer does not have to provide
its full-time employee count on Form 1094-C.
This alternative method is designed to ensure that the employer has offered coverage to “substantially all” of its fulltime employees, and therefore is not subject to an employer shared responsibility penalty, without having to know
which reported employees are full-time and which are part-time.
Although this alternative method allows reporting without identifying or specifying the number of fulltime employees, it does not exempt the employer from any penalties that might apply for failure to
report with respect to any full-time employee. Thus, reporting is still required under the normal rules for
all full-time employees, including those not offered coverage.
92
Call your trusted advisor first
If you plan on using any of the alternative reporting
methods:
• Broker
• Attorney
• Tax Professional
• Consultant
CD Opinion: The “simplification” rules are so convoluted that they will
not be worthwhile (or applicable) for most employers. I see the
possibility for many errors and only recommend the general reporting
method at this time.
93
94
Indicator Codes for Form 1094-C
Codes for Section 4980H Transition Relief Indicator -Form 1094-C Part III, Column (e)
A
50-99 Transition Relief
(ALEs with fewer than 100 full-time employees)
B
100 or more Transition Relief
(ALEs with 100 or more full-time employees)
95
For Controlled
Groups & Affiliated
Service Groups.
(I.e., Multiple
Companies sharing
common
ownership.)
96
VOLUNTARY FILING FOR 2014
File in 2015 for Calendar Year 2014
97
Voluntary 2014 Filing
Employers that wish to file voluntarily for 2014 may do so in
2015 just to check out the system.
May be a good way to test your own systems of tracking
and reporting.
Unfortunately – electronic filing system is not ready
yet.
98
6055 & 6056 IRS REPORTING PENALTIES
99
Penalties
Failure to Report or Correct Information 6055 & 6056
$30 - $100 per failure (i.e., per employee return)
Under section 6724(d), as amended by the Affordable Care Act, an applicable
large employer that fails to comply with the filing and statement furnishing
requirements of section 6056 may be subject to penalties for failure to file a
correct information return (section 6721) and failure to furnish correct payee
statements (section 6722).
However, these penalties may be waived if the failure is due to reasonable cause
and not to willful neglect (section 6724).
http://www.law.cornell.edu/uscode/text/26/6721
http://www.irs.gov/irb/2014-13_IRB/ar08.html
Always consult a tax professional!
The Future of Obamacare
101
Supreme Court Decision - June
102
TRACKING & REPORTING:
YOUR OPTIONS FOR 6055 &
6056 COMPLIANCE
103
You Are Probably Thinking…
1. What information will I need?
2. Do I have all the information and where can I get it?
3. Will I need a system or can I manage this myself?
4. How much time will time will this take?
1. HR
2. Payroll
3. Management
4. IT
5. I better start this now.
104
What information will I need? …
Hours of
Service
Eligibility
Offer of
Coverage
Safe Harbor
Employee
Enrollment
Wages
Spousal &
Dependent
Enrollment
Contributions
Spousal &
Dependent
Social
105
Do I have all this information? …
• Most employers have some but not all of this information
• Data will come from Multiple Resources
Where can I gather this information? …
106
Source of Data
Excel /
Manual
Spreadsheet
Payroll
Company
Reports
HRIS /
Benefits
Admin
System
TPA /
Insurance
Carrier
Reports
One system or maybe a combination of all 4?
107
Options for Employer Reporting
Insurance
Carriers
108
Options for Employer Reporting
Spreadsheet / Mail
Merge
Payroll ACA
HRIS / Benefits
Administration System
Stand Alone Software
109
Can you track and report without
purchasing a new ACA reporting system?
Yes. It may be time consuming but it can be done.
• Depending upon the size and complexity of your workforce
• Resources – time, money & knowledge
Manual
System
110
OPTION 1
MANUAL SPREADSHEET TRACKING
111
EMPLOYER TYPE
-Smaller employer
-Low turnover
-No Variable Hour
DISADVANTAGES
-Manual Process
-Coordinate data source
-Proper use of codes
ADVANTAGES
-Inexpensive
-No system required
DISADVANTAGES
-Time Consuming
-Must Maintain Data
-No alerts
112
I think I may need a system
• Not all systems are created equal
• Does your technology partner have the resources
• When will they be ready
• Can they track old data
• Is the data being tracked correctly
• Protected Leave and Paid/Not Worked
• FMLA, Jury Duty, Military, Paid Sick Time, Holiday
• Consider your goals for a system
• ACA Reporting only
• Measuring Eligibility and Affordability
• Engage employees
• Streamline and automate benefit enrollment process
• Employer owns data
• Carrier agnostic
113
OPTION 2
PAYROLL VENDOR
114
EMPLOYER TYPE
-Mid to Large employer
-Full Time and/or Variable Hour
ADVANTAGES
-Measures Eligibility
-Measure Affordability
-Call to action alerts
ADVANTAGES
-Centralized Data
-Utilizes Existing infrastructure
DISADVANTAGES
-May require system upgrade
and 90 to 120 day implementation
-Additional cost
-Import additional data sets
115
OPTION 3
HRIS OR BENEFITS ADMIN PLATFORM
116
EMPLOYER TYPE
ADVANTAGES
-Mid to Large employer
-Automated web enrollment
-Connects HR, Payroll & Carrier
-Full Time and/or Variable Hour
ADVANTAGES
-Measures Eligibility
-Measure Affordability
-Call to Action Alerts
-Increased Employee Engagement
and Self-Service
-Payroll Agnostic System
DISADVANTAGES
-90 to 120 day implementation
-Additional costs may apply
-Integration of multiple systems
117
OPTION 4
STAND ALONE SOFTWARE PROGRAM
118
EMPLOYER TYPE
-Large employer 1,000+
-Full Time and/or Variable Hour
ADVANTAGES
-Measures Eligibility
-Measure Affordability
-Call to Action Alerts
ADVANTAGES
-Scrubs data and identifies gaps
-Connects fractured data
DISADVANTAGES
-Lengthy implementation
-Significant costs
-Mono-line product
119
RESOURCES
AVAILABLE FROM
EASTERN BENEFITS GROUP
120
Proprietary Document
Eastern Payroll Concierge
Benefit Administration
Stand Alone Software
(Tango, HealthyFX, Equifax)
121
Electronic Filing: IRS Publication 5165
122
THINGS TO DO
123
Questions to Ask Your Vendors
Will our Payroll / HRIS / Benefits Admin System be able to…
• Capture all required data for 6056 (& 6055 if self-insured) reporting?
• Produce completed Forms 1094-C & 1095-C?
• Track and calculate hours to determine who is / is not a full time employee?
• Apply look back measurement, administrative & stability periods?
• Notify you if someone becomes FT?
• Measure and report on plan affordability for all 3 employee affordability safe harbor methods?
• Accurately apply transitional relief rules?
• Mail 1095-Cs to employee homes?
• File 1094-C & 1095-C with IRS?
How much will it cost? When will it be ready?
Can we integrate / feed data from multiple systems if necessary?
What new fields will be added to our system(s) and when/how do I put this data into
our system?
How much lead time do we need to prepare?
How much of our own estimated labor time will be required to comply with these
new reporting requirements?
124
Need more help?
Half Day ACA Reporting Workshops
Date
Morning 8:30 – 12:30
Afternoon 1:00 – 5:00
Tue., 4/28/2015
Session 1
Session 2
Wed., 4/29/2015
Session 3
Session 4
Thu., 4/30/2015
Session 5
Session 6
These are pilot program sessions. More sessions may be
offered in other locations in May & June.
125
ACHCA Members Only
If there is enough interest…
We would be happy to conduct workshops specifically
for ACHCA members.
Contact Tony Murphy
tmurphy@easternbenefitsgroup.com
781-581-4212
126
Colleen Doherty, SPHR
SVP, Compliance & Client Services
Eastern Benefits Group
cdoherty@easternbenefitsgroup.com
508-923-2442
Tony Murphy
SVP, Sales
Eastern Benefits Group
tmurphy@easternbenefitsgroup.com
781-581-4212
127