Healthcare Reform Update: 6056 Reporting ZACH PROETT, CLIENT CONSULTANT OCTOBER, 2015

Transcription

1 Healthcare Reform Update: 6056 Reporting ZCH PROETT, CLIENT CONSULTNT OCTOBER, 2015

2 Today s genda Overview of Requirements Form 1094-C Form 1095-C Refresher: Full Time Employee Examples Next Steps Gallagher Resources Caveat: The information in this presentation is based on our understanding at this time and is intended as a general overview. This is a new and developing requirement. It is highly recommended that you consult the instructions, IRS website, and other current sources for information when actually completing these forms GLLGHER BENEFIT SERVICES, INC. RTHUR J. GLLGHER & CO. BUSINESS WITHOUT BRRIERS 1

3 Overview of Requirement

4 Why Do You Care? Reporting used to enforce PPC Penalties Sledgehammer Penalty H(a) $167/month for all employees less 30 (80 for 2015) Tack hammer Penalty 4980H(b) $250/month for each employee who receives a tax subsidy on the public exchange t least 100 EEs: effective EEs: effective 2016 Proper documentation is your shield $100/return penalty failure to file 2015 GLLGHER BENEFIT SERVICES, INC. RTHUR J. GLLGHER & CO. BUSINESS WITHOUT BRRIERS 3

5 Reporting Overview 6055 Reporting 6056 Reporting Purpose INDIVIDUL mandate EMPLOYER mandate & INDIVIDUL tax credit IRS Cover Sheet 1094-B* 1094-C Individual Statement** 1095-B* Enrolled at least 1 day 1095-C Full time at least 1 month Responsible Party Carrier Employer Deadline (Employee) January 31 January 31 Deadline (IRS) February 28 (Electronic: March 31) February 28 (Electronic: March 31) Focus on 1094-C & 1095-C ** Each Statement also provided to IRS with Cover Sheet 2015 GLLGHER BENEFIT SERVICES, INC. RTHUR J. GLLGHER & CO. BUSINESS WITHOUT BRRIERS 4

6 Key: Documentation Right answer not enough: have to show your work Must be able to document BY MONTH: Which employees are full time (Monthly or lookback)? Which employees/dependents are offered coverage? Which employees/dependents accepted coverage? Which coverages are Minimum Essential Coverage? Which coverages are Minimum Value? Which coverages are ffordable? 2015 GLLGHER BENEFIT SERVICES, INC. RTHUR J. GLLGHER & CO. BUSINESS WITHOUT BRRIERS 5

7 Form 1094-C (IRS Cover Sheet)

8 6056 Reporting Employer completes this reporting For purposes of satisfying EMPLOYER mandate lso: INDIVIDUL tax credit eligibility Indicates MEC, MV and ffordability offer and acceptance on a month-by-month basis Paper distribution required unless EE elects to receive electronically (same rules as W-2) Electronic filing required if 250 EEs 2015 GLLGHER BENEFIT SERVICES, INC. RTHUR J. GLLGHER & CO. BUSINESS WITHOUT BRRIERS 7

9 Form 1094-C IRS Cover Sheet Part I: Basic Contact Information Identify Designated Governmental Reporting Entity Part II: Other Information Identify if uthoritative Transmittal Controlled Group? Indicate simplified reporting if any Part III: MEC and EE Counts monthly Part IV: Other controlled group members 2015 GLLGHER BENEFIT SERVICES, INC. RTHUR J. GLLGHER & CO. BUSINESS WITHOUT BRRIERS 8

10 Form 1094-C Page C Line 14 Code 1 t least 1 Employee Part III Column (d) & Part IV 1095-C Line 14 Code 1 or 1I t least 1 Employee Part III Column (e) Part III Column (b) Blank 2015 GLLGHER BENEFIT SERVICES, INC. RTHUR J. GLLGHER & CO. BUSINESS WITHOUT BRRIERS 9

11 Form 1094-C Page 2 Sledgehammer Penalty Shield Blank if Check Line 22 Box D Include LL Employees Blank Unless Line 21 is Yes Blank Unless Line 22 Box C 50-99: Code (No Penalty 2015) 70% for 2015 Does Not Tie to nything? Does Not Tie to nything? 100+: Code B (Reduce Sledgehammer by 80 rather than 30 for 2015) 2015 GLLGHER BENEFIT SERVICES, INC. RTHUR J. GLLGHER & CO. BUSINESS WITHOUT BRRIERS 10

12 Form 1094-C Page 3 Blank Unless Line 21 is Yes 2015 GLLGHER BENEFIT SERVICES, INC. RTHUR J. GLLGHER & CO. BUSINESS WITHOUT BRRIERS 11

13 Section 4980H Transition Relief Form 1094-C Line 22: Check Box C if any of the following apply: EEs & FTEs exempt 2015 penalties (and into 2016 for non-calendar year plans) See instructions page EEs & FTEs reduce penalty count by 80 rather than Lower Sledgehammer exemption from 95% to 70% 4. Ignore lack of offer to dependents during Non-calendar plan year 12/27/2012: extend 2014 relief into 2015 and 2016 see instructions page First pay period January, 2015 relief see instructions page 16 Items 1 or 2 and 3 will be common 2015 GLLGHER BENEFIT SERVICES, INC. RTHUR J. GLLGHER & CO. BUSINESS WITHOUT BRRIERS 12

14 Form 1095-C (Individual Statement) RTHUR J. GLLGHER & CO. BUSINESS WITHOUT BRRIERS

15 Form 1095-C, Part II, Line 14 Codes 1: Qualifying Offer 1B: MEC + MV to employee 1C: MEC + MV to employee; MEC to dependent(s) 1D: MEC + MV to employee; MEC to spouse 1E: MEC + MV to employee; MEC to spouse & dependent(s) 1F: MEC (but not MV) 1G: Self-insured plan to non-full time employee (12 months) 1H: No MEC offer 1I: Qualified Offer Transition Relief 2015 RTHUR J. GLLGHER & CO. BUSINESS WITHOUT BRRIERS 1

16 Form 1095-C, Part II, Line 16 Codes 2: Not employed during any day of month 2B: Not full-time employee; did not enroll 2C: Employee enrolled 2D: Limited non-assessment period 2E: Multiemployer interim relief 2F: ffordability W-2 safe harbor 2G: ffordability FPL safe harbor 2H: ffordability Rate of pay safe harbor 2I: Non-calendar year 4980H(b) transition relief RTHUR J. GLLGHER & CO. BUSINESS WITHOUT BRRIERS 1

17 Form 1095-C Part I: Employee and Employer information Part II: MEC, MV & ffordability month by month NY employee who was full time during NY month Complex series of codes Part III: Covered Individuals month by month Only complete if self-funded plan with no over-lapping fully insured coverage NY employee with coverage (whether or not full time) Used instead of 1095-B for INDIVIDUL Mandate Spouses, children, etc GLLGHER BENEFIT SERVICES, INC. RTHUR J. GLLGHER & CO. BUSINESS WITHOUT BRRIERS 16

18 Form 1095-C 1094-C Line 22 Box : 1 for at least 1 EE 1094-C Line 22 Box B: 1 or 1I for at least 1 EE Blank if Line 14 is 1, 1F, 1G, 1H or 1I May Be Blank. 2D Override 2B. 2E Override 2D, 2F, 2G, 2H. 2C Override ll Blank Unless Self-Funded 2015 GLLGHER BENEFIT SERVICES, INC. RTHUR J. GLLGHER & CO. BUSINESS WITHOUT BRRIERS 17

19 Refresher: Full Time Employees

20 Reporting vs. Eligibility Final Regulations ONLY specify Full Time status for reporting purposes There is no legal REQUIREMENT that all employees who are considered full time for reporting purposes must be offered coverage It may be cheaper to pay the tackhammer penalty on some employees than to open up eligibility to all employees considered full time for reporting purposes Cost/Benefit analysis may be appropriate Key: develop strategy for protecting against sledgehammer penalty 2015 GLLGHER BENEFIT SERVICES, INC. RTHUR J. GLLGHER & CO. BUSINESS WITHOUT BRRIERS 19

21 Who is Full Time? Method Pro Con Monthly Method Lookback Method 1. Simpler to Determine 2. Status not locked in for months at a time 1. FT status stable and known ahead of time 2. ble to offer coverage proactively 1. Don t know status until too late to offer coverage 2. Could result in moving in and out of FT status during year 1. Complex determination rules 2. Status locked in for entire Stability Period May use different methods/periods for certain groups of employees: Union vs Non-Union Different CBs Locations in different states Salaried vs Hourly 2015 GLLGHER BENEFIT SERVICES, INC. RTHUR J. GLLGHER & CO. BUSINESS WITHOUT BRRIERS 20

22 RTHUR J. GLLGHER & CO. BUSINESS WITHOUT BRRIERS Look-Back Method New Variable Hour EE 21 Initial Stability Period Initial Measurement Period dministrative dministrative N O V D E C J N F E B M R P R M Y J U N J U L U G S E P O C T N O V D E C J N F E B M R P R M Y J U N J U L U G S E P O C T N O V D E C Standard Measurement Period Standard Stability Period J N F E B M R P R M Y J U N J U L U G S E P O C T N O V D E C 2015 dministrative 2015 GLLGHER BENEFIT SERVICES, INC. Hired During pril, 2013

23 RTHUR J. GLLGHER & CO. BUSINESS WITHOUT BRRIERS Look-Back Method On-Going Employees Stability Period (Coverage) Measurement Period (Eligibility) dministrative dministrative N O V D E C J N F E B M R P R M Y J U N J U L U G S E P O C T N O V D E C J N F E B M R P R M Y J U N J U L U G S E P O C T N O V D E C Measurement Period (Eligibility) Stability Period (Coverage) J N F E B M R P R M Y J U N J U L U G S E P O C T N O V D E C 2015 dministrative 2015 GLLGHER BENEFIT SERVICES, INC. 22

24 Examples

25 Sample Corporation Company Information 2014: verage Full Time and FTE count 175 No Controlled Group Measurement Period: 11/1/ /31/2014 Stability Period: 1/1/ /31/2015 Plan Design (Plan Year = Calendar Year) Fully-insured Bronze plan offered to all employees, spouses and dependents (regardless full time status) Salaried employees may begin medical coverage 1 st day of the month after hire and pay $50/month for single coverage Hourly employees may begin medical coverage 1 st day of the 2nd month after hire and pay $1/hour for single coverage 2015 GLLGHER BENEFIT SERVICES, INC. RTHUR J. GLLGHER & CO. BUSINESS WITHOUT BRRIERS 24

26 2015 GLLGHER BENEFIT SERVICES, INC. 25

27 2015 GLLGHER BENEFIT SERVICES, INC. 26

28 Jane Doe Salaried employee Hire Date: 5/12/2000 Termination Date: N/ Measurement Period Monthly Hours: Monthly Salary: $2,000 Elected family coverage in November, 2014 for GLLGHER BENEFIT SERVICES, INC. RTHUR J. GLLGHER & CO. BUSINESS WITHOUT BRRIERS 27

29 2015 GLLGHER BENEFIT SERVICES, INC. 28

30 Richard Roe Hourly employee Hire Date: 3/18/2005 Termination Date: N/ Measurement Period Monthly Hours: Hourly Salary: $25.00 Elected family coverage in November, 2014 for 2015 Hours 2015: Jan Feb Mar pr May Jun Jul ug Sep Oct Nov Dec GLLGHER BENEFIT SERVICES, INC. RTHUR J. GLLGHER & CO. BUSINESS WITHOUT BRRIERS 29

31 2015 GLLGHER BENEFIT SERVICES, INC. 30

32 Mary Smith Salaried employee Hire Date: 4/2/2015 Termination Date: N/ Initial presumed weekly hours: Monthly Salary: $5,000 Elected family coverage upon hire 2015 GLLGHER BENEFIT SERVICES, INC. RTHUR J. GLLGHER & CO. BUSINESS WITHOUT BRRIERS 31

33 2015 GLLGHER BENEFIT SERVICES, INC. 32

34 Joe Hardworker Hourly employee Hire Date: 3/18/2005 Termination Date: 8/25/2015 (coverage ends) Measurement Period Monthly Hours: Hourly Salary: $30.00 Elected family coverage in November, 2014 for 2015 Hours 2015: Jan Feb Mar pr May Jun Jul ug Sep Oct Nov Dec GLLGHER BENEFIT SERVICES, INC. RTHUR J. GLLGHER & CO. BUSINESS WITHOUT BRRIERS 33

35 2015 GLLGHER BENEFIT SERVICES, INC. 34

36 Sam Jones Salaried employee (non-variable hour employee) Hire Date: 7/1/2015 Termination Date: N/ Initial presumed weekly hours: Monthly Salary: $3,000 Waived medical coverage for 2015 upon hire 2015 GLLGHER BENEFIT SERVICES, INC. RTHUR J. GLLGHER & CO. BUSINESS WITHOUT BRRIERS 35

37 2015 GLLGHER BENEFIT SERVICES, INC. 36

38 Leslie Loyal Hourly employee (variable hour employee) Hire Date: 2/20/2015 Termination Date: N/ Initial Measurement Period: 3/1/2015 2/28/ Hourly Salary: $20.00 Elected family coverage when hired Hours 2015: Jan Feb Mar pr May Jun Jul ug Sep Oct Nov Dec GLLGHER BENEFIT SERVICES, INC. RTHUR J. GLLGHER & CO. BUSINESS WITHOUT BRRIERS 37

39 Not required to file until considered full time 2015 GLLGHER BENEFIT SERVICES, INC. 38

40 Next Steps

41 What Should You be Doing? Determine controlled group status/members Coordinate data collection/filing within controlled group Designated Government Entity for consolidated filing? Finalize outsourcing arrangements (if any) Finalized sledgehammer penalty protection strategy Collect 2014/2015 data by month (Payroll vendor?) Who is full time (Variable Hour Employees)? Who is offered coverage? Elected coverage? Was coverage Minimum Value? ffordable? Request dependent SSN Initial request, following 12/31 & 1 more time 2015 GLLGHER BENEFIT SERVICES, INC. RTHUR J. GLLGHER & CO. BUSINESS WITHOUT BRRIERS 40

42 GLLGHER RESOURCES 2015 GLLGHER BENEFIT SERVICES, INC. RTHUR J. GLLGHER & CO. BUSINESS WITHOUT BRRIERS 41

43 Resources: ajghealthcarereform.com 2015 GLLGHER BENEFIT SERVICES, INC. RTHUR J. GLLGHER & CO. BUSINESS WITHOUT BRRIERS 42

44 Resources Forms Matrix: Decision Tree: Flowchart: Reporting FQs: Counting Hours FQs: Checklist Insured: Checklist Self-Funded: Transition Relief: Simplified Reporting: ction Items Insured: ction Items Self-Funded: Sample Employee Communications: GLLGHER BENEFIT SERVICES, INC. RTHUR J. GLLGHER & CO. BUSINESS WITHOUT BRRIERS 43