HOW UTILIZING WORKDAY WILL HELP WITH AFFORDABLE CARE ACT (ACA) REPORTING COMPLIANCE

Transcription

1 HEALTH WEALTH CAREER HOW UTILIZING WORKDAY WILL HELP WITH AFFORDABLE CARE ACT (ACA) REPORTING COMPLIANCE DECEMBER 10, 2015 Wade A. Symons, Mercer Jennifer White, Mercer MERCER

2 TODAY S SPEAKERS WADE SYMONS Health and Benefits Regulatory Resource Group National Leader Mercer wade.symons@mercer.com QUESTIONS Please type your questions in the Q&A section of the toolbar and we will do our best to answer as many questions as we have time for. To submit a question while in full screen mode, use the Q&A button, on the floating panel, on the top of your screen. JENNIFER WHITE Workday Practice Associate Mercer jennifer.white@mercer.com CLICK HERE FEEDBACK Please take the time to fill out the feedback form at the end of this webcast so we can continue to improve. MERCER

3 TODAY S DISCUSSION Are you ready for ACA reporting? Workday ACA pre-requisites. ACA reporting. Statements and reporting. Reporting penalties and extensions. Summary. Questions and answers. MERCER

4 ARE YOU READY FOR ACA REPORTING? 1. Review required data elements. 2. Locate your data. Many employers don t know how they will handle ACA reporting. 3. Determine vendor capabilities. 4. Decide who will aggregate your data and complete IRS forms. 5. Begin implementation! In House 31% 11% 41% Payroll Vendor 10% 7% Enrollment Vendor Other Don t Know Source: Mercer, Survey, Health Care Reform Five Years In, 2015 MERCER

5 ARE YOU READY FOR ACA REPORTING? ACA REPORTING BEGINS IN 2016 (FOR 2015 DATA) PURPOSE WHO REPORTS IRS REPORTING INDIVIDUAL REPORTING MINIMUM ESSENTIAL COVERAGE EMPLOYER SHARED RESPONSIBILITY Enforce individual mandate. Enforce employer mandate. Validate public exchange premium subsidy eligibility. Every entity providing Minimum Essential Coverage (MEC) to an individual. Include all covered individuals enrolled in MEC. Every large employer with 50 or more full-time or equivalent employees. Include each full-time employee. IF FILING AT LEAST 250 FORMS 1095-C, MUST E-FILE. To each responsible individual who enrolls self or others in MEC. Each employee who was full time for at least one month during reporting year DUE DATES E-file: Mar 31 Paper: Feb. 29 Feb 1 MERCER

6 WORKDAY ACA PRE-REQUISITES Workday Benefits must be in use, with US Medical coverage tracked in Workday. Complete employee and dependent medical history should be in Workday for the entire calendar year. Payroll hours for the entire calendar year should be in Workday, or hours must be loaded into Workday if tracked outside of Workday. COBRA enrollment data for the calendar year should be obtained and loaded into Workday. Understanding of ACA Certifications of Eligibility (transition relief). MERCER

7 WORKDAY ACA PRE-REQUISITES AFFORDABLE CARE ACT DASHBOARD REPORTS Dashboards showing employees working more than federal full-time standard allows you to track employees who may become eligible for medical coverage, or have recently become eligible, based on their hours worked. MERCER

8 WORKDAY ACA PRE-REQUISITES VIEW ACA MEASUREMENT HISTORY FOR WORKER (HOURS WORKED DURING PERIOD) MERCER

9 WORKDAY ACA PRE-REQUISITES ACA MEASUREMENT HISTORY MERCER

10 ACA REPORTING HOW LARGE EMPLOYERS WILL REPORT (MEC AND ESR) SELF-INSURED EMPLOYERS 1094-C Transmittal Form 1095-C Employee Statement Employer IRS Information Return Employer reports both MEC and ESR information on combined forms. FULLY-INSURED EMPLOYERS 1094-B Transmittal Form 1094-C Transmittal Form 1095-B Employee Statement 1095-C Employee Statement Insurer IRS Information Return Employer IRS Information Return Insurer will provide MEC information on Form 1094-B and 1095-B. Employer will provide ESR information on Form 1094-C and 1095-C. MERCER

11 ACA REPORTING CONTROLLED GROUP ISSUES Controlled groups are employers with sufficient common ownership or who are sufficiently related under IRS rules. Controlled group members are aggregated to determine whether the employers in the group will be subject to employer shared responsibility(esr)/mec and ESR reporting. However, ESR assessments and IRS reporting are made on a controlled group member basis employer by employer. Each separate employer in a controlled group files separately. Individual employers subject to reporting are called Applicable Large Employer (ALE) Members. Group of employers is called an Aggregated ALE Group. Third party or other member of group can report on behalf of ALE member. Liability remains with each ALE member. Not consolidated or plan-based reporting. MERCER

12 THE 1095-C INDIVIDUAL STATEMENT (IN BRIEF) Part PART I PART II INFORMATION INCLUDED Employee and employer identifying information. Full-time employee ESR information (by month). Terms of any coverage offered (by code). Lowest employee cost of self-only coverage with minimum value. Indicate either enrollment in coverage or various reasons plan or pay assessment may not apply (by code). - In some cases may be blank. Self-funded employer uses special code for non-full-time employee enrolled in MEC. PART III MEC reporting (self-funded employer only). Names and TINs of all covered individuals. Indicate months with at least one day of coverage for each covered individual. MERCER

13 FORM 1095-C INDIVIDUAL STATEMENT MERCER

14 FORM 1095-C EMPLOYEE STATEMENT LINE 14 AND LINE 16 INDICATOR CODES Line 14 Offer of Coverage, Series 1 Codes 1A Qualifying Offer MEC providing FPL affordable MV coverage offered to full-time employee, and at least MEC offered to spouse and dependents. 1B MEC providing MV offered to employee only. 1C MEC providing MV offered to employee and at least MEC offered to dependents (not spouse). 1D MEC providing MV offered to employee and at least MEC offered to spouse (not dependents). 1E MEC providing MV offered to employee, and at least MEC offered to dependents and spouse. 1F MEC not MV offered to employee, employee spouse or dependents, or employee, spouse and dependents. 1G Offer of coverage to an employee not a full-time employee for any month of the calendar year and who enrolled in selfinsured coverage for one or more months of the year. 1H No offer of coverage (no coverage offered or coverage is not MEC) used often for the months employee is hired or terminates employment; COBRA for termination of employment; multiemployer interim relief. 1I Qualifying Offer Transition Relief Employee (and spouse or dependents) received no offer of coverage; received a non-qualifying offer or received a qualifying offer for less than 12 months. Line 15 Employee Share of Lowest Cost Monthly Premium, for Self-Only MV Coverage Complete only if code 1B, 1C, 1D or 1E is entered in any box on Line 14. Line 16 Applicable Section 4980H Safe Harbor, Series 2 Codes 2A Employee not employed on any day of the month. 2B Employee is not a full time employee (and did not enroll for the month, if offered) use in month employee terminates employment if coverage ends before last day of month and COBRA not elected. 2C Employee enrolled in coverage offered (trumps all other codes except 2E). 2D Employee in 4980H(b) limited non-assessment period (e.g., waiting period; initial measurement period; month employees is hired (trumps 2B)). 2E Multiemployer interim relief rule. Trumps all other codes. 2F Form W-2 safe harbor for affordability. 2G FPL safe harbor for affordability. 2H Rate of pay safe harbor for affordability. 2I Non-calendar year transition relief applies. MERCER

15 FORM 1095-C PART II INDIVIDUAL STATEMENT EXAMPLE: PETE Full-time hire July 15, offered MV coverage to EE, spouse and children as of August 1 and enrolled. Line 14 Use no offer of coverage code 1H for January July. Code 1E for August December. 1H 1H 1H 1H 1H 1H 1H 1E 1E 1E 1E 1E A 2A 2A 2A 2A 2A 2D 2C 2C 2C 2C 2C Line 16 Use not employed code 2A for January June; limited non-assessment/waiting period code 2D for July; and enrolled code 2C for August December. MERCER

16 1095-C PART III: INFORMATION THAT MUST BE REPORTED Self-Insured plans report MEC on the 1095-C. Taxpayer ID numbers (TINs or SSNs) for all covered individuals. Coverage dates = months enrolled and entitled to at least one day of coverage. WHAT IF A SSN IS NOT AVAILABLE? Date of birth may be used if SSN is not available after reasonable efforts to obtain (and may be used in interim). Reasonable effort: An initial solicitation made at an individual s first enrollment; or, if already enrolled on 9/17/2015, the next open season; The second solicitation is made at a reasonable time thereafter; The third solicitation is made by December 31 of the year following the second solicitation. MERCER

17 1095-C WORKER PRINTING ELECTION Employee specifies their printing preferences in Workday Self Service. MERCER

18 GENERATING 1095-C FORMS IN WORKDAY 1095-C FORM GENERATION Update Medical Plans offered in the US to include the new US Affordable Care Act Options. Create 1095-C Forms Data and Generate and review 1095-C Forms in Workday. MERCER

19 PRINTING 1095-C FORMS 1095-C Forms can be printed in bulk. MERCER

20 COBRA/UNION COVERAGE COBRA Terminated employee - Code 1H (No offer of coverage) should be entered for any month for which the offer of COBRA continuation coverage applies. Enter code 2A (employee not employed during the month) in line 16. Reduction in hours (active employee) - An offer of COBRA coverage that is made to an active employee is reported in the same manner and using the same code as an offer of that type of coverage to any other active employee. Use self-only COBRA rates in line 15, and applicable Series 2 code in line 16; coverage may not be affordable. Union/Multi-employer Plan Coverage Employers must report on full-time employees that receive coverage through a union plan or multiemployer plan. An employer relying on the multiemployer plan interim relief should enter code 1H (No offer of coverage) on line 14 for any month for which the employer enters code 2E on line 16 (indicating that the employer was required to contribute to a multiemployer plan on behalf of the employee for that month and therefore is eligible for multiemployer interim rule relief). MERCER

21 THE 1094-C TRANSMITTAL FORM (IN BRIEF) INFORMATION INCLUDED PART I PART II PART III PART IV Employer identifying information for ALE member. Number of 1095-Cs submitted with this transmittal form. Background ESR and (if self-funded) MEC information. Whether this transmittal is authoritative. If authoritative, complete Parts II-IV. Total number of 1095-Cs for this employer. Part of ALE member group (Y/N). Indicate use of simplified offer method or certain 2015 transitional relief. Aggregate ESR data (by month). MEC offer to substantially all full-time employees (Y/N) Column (a). Full-time employee count Column (b). All employee count Column (c). Aggregate group member data (if applicable). MERCER

22 FORM 1094-C TRANSMITTAL PARTS I AND II MERCER

23 COMPARISON OF SIMPLIFIED METHODS 98% METHOD QUALIFYING OFFER METHOD 2015 QUALIFYING OFFER METHOD COVERAGE REQUIREMENTS Minimum value & affordable using rate of pay, W-2 or FPL safe harbor. MEC for dependents (per instructions). Minimum value & affordable using FPL safe harbor (for employees). MEC for spouses & dependents. Minimum value & affordable using FPL safe harbor (for employees). MEC for spouses & dependents. OFFER REQUIREMENTS MV offer in all 12 months to at least 98% of employees and dependents for whom Form C is filed. New! Exclude employees in limited non-assessment period (LNP)/waiting period from 98% calculation. MV offer to full-time employees with at least MEC offer to spouses and dependents. No minimum percentage. MV offer to 95% of full-time employees with at least MEC offer to spouses and dependents. Don t count employees in limited nonassessment period toward 95%. TIME PERIOD FOR RELIEF All 12 months for those for whom employer provides Form 1095-C.. Any month during which the employee receives qualifying offer. All 12 months during which the employee is a FT employee and receives qualifying offer. RELIEF PROVIDED Employer does not have to provide total monthly count of full-time employees. (Skip 1094-C, Part III, Column (b)). Do not complete Line 15 on C (lowest cost, self only premium) for employees receiving qualifying offer. Do not complete Line 15 on 1095-C (lowest cost, self-only premium) for ANY FT employee (not just those receiving qualifying offer). Send generic statement ONLY to employees for insured plan and those who didn t enroll in selffunded plan (must have offer for 12 months). Send 1095-C to IRS. Send special generic statement to ONLY to employees for insured plan and those who didn t enroll in self-funded plan (do not need to have offer for all 12 months). Send 1095-C to IRS. MERCER

24 FORM 1094-C TRANSMITTAL PART III MERCER

25 EMPLOYER SHARED RESPONSIBILITY REPORTING FORM 1094-C TRANSMITTAL PART III Columns (a & b) Employees in limited non-assessment periods aren t full-time on 1094-C. Includes: - First month of employment for hire dates other than first of month. - For full-time employees at hire, up to 3 full calendar months after month of hire with waiting period. - For variable hour, part-time or seasonal (if employer using look-back measurement method) initial measurement period + initial administrative period. Also don t need to be counted in minimum percentages for alternative methods of reporting (i.e. 98% Offer Method). MERCER

26 EMPLOYER SHARED RESPONSIBILITY REPORTING FORM 1094-C TRANSMITTAL Example: Pete Hired January 15, 2015, expected to be full-time. Pete and children offered at least MEC April 1, Column (b) January March Exclude Pete in full-time employee count. Column (a) January March Exclude Pete in determining if 70% of full-time employees (for 2015) have been offered MEC. MERCER

27 EMPLOYER SHARED RESPONSIBILITY REPORTING FORM 1094-C TRANSMITTAL Column (c) Include all employees. Report each month unless count is identical for all months. Measure on: First day of month. Last day of month. First day of first payroll period in month. Last day of first payroll period in month (if in same month as first day). Use same method each month. MERCER

28 FORM 1094-C TRANSMITTAL - PART IV MERCER

29 GENERATING 1094-C FORM IN WORKDAY 1094-C FORM GENERATION Configure the 1094-C settings: Set up the ACA ALE Groups (Companies to be included in the Applicable Large Employer Group). Certifications of Eligibility H Safe Harbor Transition Relief. Qualifying Offer Method. 98% Offer Method. Minimum Essential Coverage Offer Indicator. MERCER

30 VIEW 1094-C DATA IN WORKDAY MERCER

31 VIEW 1094-C DATA IN WORKDAY (CONT.) MERCER

32 GENERAL MEC REPORTING FORMS 1094-B TRANSMITTAL AND 1095-B PARTICIPANT STATEMENT MERCER

33 REPORTING PENALTIES AND EXTENSIONS ACA REPORTING PENALTIES PENALTIES ARE: Forms 1094-B/C transmittal returns - $250 (up from $100) for each return that s inaccurate or not filed capped at $3M (up from $1.5M), plus; Forms 1095-B/C individual statements - $250 (up from $100) for each statement that s missing or incorrect capped at $3M (up from $1.5M). Uncapped penalties of $500 (up from $250) per return or statement can apply in cases of intentional disregard. IRS can waive penalties for reasonable cause and reduce penalties if failures and errors are corrected within certain time frames. IRS won t impose penalties in 2016 for incomplete or incorrect 2015 reports, as long as the employer has made a good-faith effort to comply with the ACA reporting requirements. This relief generally won t apply to an employer that fails to furnish individual statements or file information returns on time. MERCER

34 REPORTING PENALTIES AND EXTENSIONS ARE EXTENSIONS AVAILABLE? 1095-C Employers may apply to the IRS in writing for a 30-day extension (before initial deadline). Approval is at the IRS s discretion. Employers should consider employee reaction to a delay the 1095-C may be required in order to complete the employee s personal income tax filing C The IRS will grant an automatic 30-day extension upon an employer s filing of Form 8809 before the initial filing deadline. A request for a second 30-day extension may be submitted before the initial extension period ends, but is not automatically granted. Automatic extension may not be available in 2017 and later years. MERCER

35 SUMMARY HOW CAN WORKDAY HELP WITH ACA COMPLIANCE AND REPORTING THREE MAIN FEATURES: Affordable Care Act Dashboards. Provide information on which Part- Time employees are working more than the Federal Full-Time Standard. Measurement Periods and a Benefit Event (Passive Event) are set up to automatically generate a benefit event and offer Medical Coverage to employees who are Qualified as Full-Time per ACA Standards (working 30+ hours per week). Generation of 1094-C and 1095-C Forms electronically based on configuration and benefits enrollment data in Workday. MERCER

36 SUMMARY ACA FUTURE ENHANCEMENTS COBRA EIB to load COBRA enrollment data into Workday - no estimated delivery date yet. Connector from Workday to the IRS for electronic filing of the 1094-C and 1095-C Forms - expected January Ability to void a prior submission for a worker and send a corrected form to the IRS - expected February MERCER

37 QUESTIONS AND ANSWERS: WADE SYMONS Health and Benefits Regulatory Resource Group National Leader Mercer QUESTIONS Please type your questions in the Q&A section of the toolbar and we will do our best to answer as many questions as we have time for. To submit a question while in full screen mode, use the Q&A button, on the floating panel, on the top of your screen. JENNIFER WHITE Workday Practice Associate Mercer jennifer.white@mercer.com CLICK HERE FEEDBACK Please take the time to fill out the feedback form at the end of this webcast so we can continue to improve. MERCER

38 MERCER

39 DISCLAIMER Attendee understands that Mercer is not engaged in the practice of law and this presentation, which may include commenting on legal issues or regulations, does not constitute and is not a substitute for legal advice. Accordingly, Mercer recommends that Attendee secures the advice of competent legal counsel with respect to any legal matters related to this presentation or otherwise. The information contained in this document and in any attachments is not intended by Mercer to be used, and it cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code or imposed by any legislative body on the taxpayer or plan sponsor. MERCER