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ACA Reporting for Large Employers

Learn about ACA reporting requirements for large employers, including deadlines, forms, and penalties. Find out who must report and the specific rules for plan sponsors of self-insured plans and government employers. Discover the key information needed for IRS forms and the reporting process. Get insights on determining the forms to file, reporting penalties, and authoritative transmittals.

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ACA Reporting for Large Employers

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  1. ACA Reporting Requirements for Large EmployersCalifornia Association of Joint Powers Authorities (CAJPA) Annual Conference | September 17, 2015 Presented by: Heather DeBlanc

  2. ACA Reporting Requirements

  3. Two Types of Annual Reporting • Insurer Reporting • Self- insured plan sponsors / insurers • Applicable Large Employer Reporting (Forms 1094C & 1095C) • Incl. employers that sponsor self-insured plans • Both require written statement to Employee/responsible individual

  4. Purpose of the Applicable Large Employer Reporting Requirements • Inform IRS of large employer compliance with Employer Mandate • Determine eligibility for exchange subsidies (aka premium tax credits)

  5. Method/Deadline of Filing • Data from prior year (2015 data reported in 2016 for first annual filing) • More than 250 returns, must e-file: • By Mar 31 (2016 first filing) • Less than 250 returns, can: • By Feb 28, hard copy filing; or • By Mar 31, e-file (optional) • Written statement to each employee reported on due on or before Jan 31 (first due 2016)

  6. Who Must Report?

  7. Who Must Report? • Health insurers and plan sponsors of self-insured plans must report coverage of enrolled individuals • “Applicable large employers” as defined by the ACA must report offer of lowest cost coverage • Plan sponsors that are also large employers must report both covered individuals and offer of lowest cost coverage

  8. Plan Sponsors of Self-insured Plans • Sponsors of single employer plans • Employer must report • Special rule for government employers • Written Agreement (employer with self-insured plan and another related unit, agency, instrumentality) • By Jan 31 • Designated agency is sponsor for reporting

  9. “Applicable Large Employers” • Information reporting requirements only to large employers • 50 or more full-time employees, including FT equivalents • Must report even if taking advantage of 50 to 99 FT employee transition relief for 2015

  10. Applicable Large Employer (ALE) • Each ALE member • Special rule for government employers • Written Designation (signed by ALE member & designee) • Specific language required • Designated by Jan 31

  11. IRS Forms and the Reporting Process

  12. Required Returns • A return is required each year for each full-time employee on whom reporting is required (Form 1095) • Single transmittal to IRS of all returns for the year (Form 1094 = transmittal) • Report information regarding type of coverage offered and applicable transition relief

  13. Reporting Penalties • Failure to timely file correct return • Good faith compliance sufficient for 2016 • $250 per return (up to $3,000,000) • Failure to timely provide correct written statement to employee • $250 per statement (up to $3,000,000) • Intentional disregard of filing requirements • $500 per return (no calendar year cap)

  14. Determining Forms to File

  15. Form 1094-C

  16. IRS Transmittal Form 1094-C • Transmittal form for employers filing 1095-C • Content • Name and contact information of employer • Total number of Forms 1095-C submitted • Offered minimum essential coverage • Number of full-time employees per month • Total employees per month

  17. Form 1094-C – Parts I and II

  18. Designated Governmental Entity (DGE) – Lines 9-16 • Person or persons part of or related to the governmental unitthat is the ALE Member • File separate Forms 1095-C and 1094-C • Must have written designation by Jan. 31 incl: • Category of employees responsible for reporting • Agreement/Certification of designation • Acknowledgment of responsibility • Identify ALE member as subject to penalties

  19. Authoritative Transmittals – 1094-C, Part II, Line 19

  20. DGE Example – Page 2 of Reporting Instructions • County is an ALE • ALE Members: School District, Police District, and County General Office. • School District designates the state to report on behalf of the teachers and reports for itself for its remaining FT employees. • The School District or the state must file Authoritative Transmittal

  21. Authoritative Transmittals • Filing multiple Forms 1094-C permitted • Filed by each separate employer (aka ALE Member) • Line 19 of 1094-C • Reporting aggregate employer-level data

  22. Authoritative Transmittal w/ DGE • Designated Governmental Entity • Must also designate one of the multiple Forms 1094-C as the authoritative transmittal and report the aggregate employer-level data for the government unit

  23. Line 20 – 1094-C, Part II • Employer’s full-time employees that are filed with this transmittal • To be filed with another transmittal filed by or on behalf of the employer • Non-full-time employees who enroll in the employer’s employer-sponsored self-insured health plan

  24. Line 21 – 1094-C, Part II • Employer’s full-time employees that are filed with this transmittal • To be filed with another transmittal filed by or on behalf of the employer • Non-full-time employees who enroll in the employer’s employer-sponsored self-insured health plan

  25. Line 22 – 1094-C, Part II

  26. Qualifying Offer Method (Box A) • Qualifying Offer • Affordable under Federal Poverty Line safe harbor • Employee’s self-only premium contribution to lowest cost plan option not more than 9.5% of the monthly Federal Poverty Line • Offer of coverage to spouse and dependents • Check if using for one or more full-time employees

  27. Qualifying Offer Made For Any Month • If Qualifying Offer made for any month, Employer: • May report code 1A on Form 1095-C, line 14 instead of the dollar amount on line 15; can’t do both • Can use code 1A for any single month or all 12 calendar months • Check Box A if you are doing this

  28. Qualifying Offer Method (Box A) • If Qualifying Offer for all 12 months, ER may provide simplified notice to employee: • ER name, address, EIN, contact name & info; • Statement: For all 12 months the employee and his/her spouse and dependents received a “qualifying offer” and is therefore not eligible for a premium tax credit. • Not available for self-insured reporting • If Qualifying Offer NOT made for all 12 months, ER must provide copy of Form 1095-C unless Transition Relief applies

  29. Line 22 – 1094-C, Part II

  30. 2015 – Qualifying Offer Transition Relief (Box B) – 2015 ONLY To use, large employer mustcertify it made a Qualifying Offer: • For one or more months • To at least 95% of full-time employees

  31. Qualifying Offer Transition Relief (Box B) – 2015 ONLY • Check if made qualifying offer for one or more months of 2015 to at least 95% of full-time employees • For employees who do not receive Qualifying Offer for all 12 months, incl. those receiving no offer • Simplified reporting permitted

  32. Qualifying Offer Transition Relief (Box B) – 2015 ONLY • Employer name, address, and EIN • Contact name and telephone number at which the employee may receive information about the offer of coverage (if any) and Form 1095-C filed with IRS • Statement indicating employee and his or her spouse and dependents may be eligible for a premium tax credit for one or more months of 2015 • A statement directing the employee to see Pub. 974 for more information on eligibility for the premium tax credit

  33. Line 22 – 1094-C, Part II

  34. Section 4980H Transition Relief (Box C) • Applicable large Employer with less than 100 FT ee (incl. FTE); or • Calculation of Penalties (i.e. 70% as substantially all; less 80) • To take advantage of these, check this Box & complete Form 1094-C, Part III, column (e)

  35. 98% Offer Method (Box D) • Certify on Form 1094-C that a “98% offer” was made • At least 98% of all employees (including part-time) were offered affordable, minimum value coverage • Affordable under any affordability safe harbor • Not required to separately identify or report number of full-time employees in Part III, Column B of 1094-C (still must file 1095-C for each full-time employee)

  36. Form 1094-C – Part III

  37. Form 1094-C – Part III Info to calculate Penalty A – not offering to substantially all FT employees • (column a) Yes if offered to 95% or 70% of FT employees (as to ea. month or line 23) (*No – red flag for penalty trigger) • (column b) Skip if using 98% Offer Method • (column b) Enter # FT ee’s (don’t include ee in a Limited Non-Assessment Period)

  38. Limited Non-Assessment Period • Not subject to penalties during the period • EE must be offered affordable MV coverage by first day after end of period • New FT – first 3 full calendar months • Look Back Safe Harbor – Initial MP + Admin period for new variable hour, seasonal, pt ee. • Change in status

  39. Form 1094-C – Part III (column c) Total employee count – first or last day of month (consistent each month of year) • include all whether in LNP, PT, FT (column d) Penalty A is total # FT ee less 30 (80 in 2015). If this column is checked, the employer is related to a larger group and penalty calculation will be with regard to whole aggregate group. If enter X for any month, complete Part IV.

  40. Form 1094-C – Part III (column e) Use if completed Box C on line 22 (4980H Transition Relief) • Code A – 50-99 relief; OR • Code B – 100 or more relief

  41. Form 1095-C

  42. IRS Reporting Form 1095-C • Who: Applicable large employers • What: Report information regarding type of coverage offered and applicable transition relief • How: • One Form 1095-C for each full-time employee • One Form 1095-C for any employee who enrolls in coverage (if employer sponsors self-insured health plans)

  43. Form 1095-C

  44. Penalty Reminder – Reporting Trigger Remember IRS Potential Penalty, if do not OFFER: • MEC (Minimum Essential Coverage) • MV (Minimum Value) • To substantially all full-time employees • 70% (in 2015); 95% (2016 & beyond) • AND dependents (i.e. children up to age 26)

  45. Form 1095-C – Part II

  46. Indicator Codes – Form 1095-C, Line 14 – Offer of Coverage 1A. MV MEC to FT ee affordable based on 9.5% FPL plus MEC to spouse & dependents 1B. MEC MV to ee only 1C. MEC MV to ee + MEC to dependents (not spouse) 1D. MEC MV to ee + MEC to spouse (not dependents)

  47. Indicator Codes – Form 1095-C, Line 14 – Offer of Coverage 1E. MEC MV to ee & MEC to dependents & spouse 1F. MEC NOT MV to ee, or ee + spouse or dep., or ee, spouse & dep. 1G.Offer to ee (not FT) & enrolled in self-insured coverage. 1H. No offer of coverage. 1I. Qualified Offer Transition Relief

  48. Line 15 – Form 1095-C • Employee’s share of lowest cost monthly premium only for self-only minimum value coverage • Complete only if Line 14 has Code 1B, 1C, 1D, or 1E • Complete if offered coverage • Do not complete if coverage was not MEC • Do not complete if coverage offered did not provide MV

  49. Line 16 – 1095-CApplication of 4980H Safe Harbor 2A. EE not employed during month 2B. EE not FT 2C. EE enrolled in coverage offered 2D. EE in Limited Non-Assessment period 2E. Multiemployer interim rule relief 2F. Form W-2 Safe Harbor 2G. FPL Safe Harbor 2H. Rate of Pay Safe Harbor 2I. Non-Calendar Year Transition Relief (2015)

  50. Multi-Use Indicator Codes – Form 1095-C, Line 16 • 2B • Not FT EE; did not enroll in MEC • FT, but offer of coverage ended before last day of month because employee terminated employment during month • Jan. 2015 if offered affordable MV coverage no later than first day of first payroll period beginning Jan 2015

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