ACA IRS INFORMATION REPORTING: WHAT DO I NEED TO KNOW?

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1 CPAs & ADVISORS ACA IRS INFORMATION REPORTING: WHAT DO I NEED TO KNOW? TO RECEIVE CPE CREDIT Participate in entire webinar Answer polls when they are provided If you are viewing this webinar in a group Complete group attendance form All group attendance sheets must be submitted to [email protected] within 24 hours of webinar Answer polls when they are provided If all eligibility requirements are met, each participant will be ed their CPE certificate within 15 business days of live webinar 1

2 Robert Conner, CPA National Tax Assistant Director Jim Ashley, CPA Senior Manager AGENDA Purpose of reporting requirement Applicable forms & when they are due Penalties for noncompliance Information needed to complete forms What I should be doing now to prepare BKD s solution to ACA information reporting 2

3 PURPOSE OF REPORTING REQUIREMENT ACA s #1 goal is for all individuals to have access to affordable health coverage Government is using a stick vs. carrot approach to ensure compliance PURPOSE OF REPORTING REQUIREMENT Individual mandate All individuals, unless exempt, are required to maintain Minimum Essential Coverage (MEC) or pay a penalty Reporting is necessary to determine whether individuals are maintaining MEC 3

4 PURPOSE OF REPORTING REQUIREMENT Employer mandate Applicable Large Employers (ALEs) are required to provide affordable MEC to full-time employees or risk penalty if a full-time employee receives a premium tax credit or cost share subsidy Reporting is required for all large employers (those with 50+ full-time employees & equivalents) regardless of coverage offering Reporting is necessary for the IRS to determine If employer has complied with mandate If an employee is eligible for a premium tax credit or cost share subsidy PURPOSE OF REPORTING REQUIREMENT New tax forms help IRS monitor compliance & assess penalties when applicable 1095-A 1094-B/1095-B 1094-C/1095-C 4

5 2015 FORMS 1095-A, 1095-B & 1095-C DECISION TREE: HOW IS PLAN FUNDED? 5

6 HOW IS A 50 EMPLOYEE THRESHOLD MEASURED? Threshold is determined based on previous year employment numbers i.e., If employer has fewer than 50 full-time employees, including full-time equivalent employees, on average during the prior year, employer does not have a 1095-C reporting requirement (1094-B/1095-B may apply if selfinsured) HOW IS A 50 EMPLOYEE THRESHOLD MEASURED? Controlled groups are treated as one employer (e.g., parent-subsidiary controlled groups, brother-sister controlled groups & combined groups) Affiliated service groups & management company arrangements are also treated as one employer If combined number of full-time employees & equivalents for group is 50+, each employer in the group is subject to combined information reporting requirements 6

7 HOW IS A 50 EMPLOYEE THRESHOLD MEASURED? What if employer was not in existence during preceding calendar year? Determination is based on average number of full-time employees & equivalents reasonably expected to be employed on business days in current calendar year WHO IS A FULL-TIME EMPLOYEE? A full-time employee for any calendar month is an employee who Has on average at least 30 hours of service per week during calendar month or At least 130 hours of service during calendar month *Excludes partners & 2% S corporation shareholders 7

8 WHO IS A FULL-TIME EQUIVALENT EMPLOYEE? Full-time equivalent employees are determined using two steps 1. Combine number of hours of service of all non-fulltime employees for month, but do not include more than 120 hours of service per employee 2. Divide total by 120 DECISION TREE REPORTING RECAP 8

9 INFORMATION REPORTING RULES FOR 1095-B & C Due dates for 2015 forms Forms must be sent to recipients by January 31, 2016 Recipients must receive hard copies of forms unless employer acquires affirmative consent for electronic submission (W-2 consent does not count) Forms must be transmitted to IRS by February 29, 2016, if paper filing, or March 31, 2016, if filing electronically IRS electronic filing is mandatory if submitting 250 or more forms 30-day IRS filing extension is granted for paper or e-filing by completing Form 8809 Failure or late filing of forms could subject employer to a penalty of $250 per form INFORMATION REQUIRED FOR 1095-C & 1094-C 9

10 1095-C: PART I EMPLOYEE & EMPLOYER INFO 1095-C: PART II EMPLOYEE OFFER & COVERAGE LINE 14 - MAY NOT BE LEFT BLANK LINE 16 LEAVE BLANK IF NO CODE APPLIES 10

11 1095-C: PART III ONLY FOR SELF-INSURED PLAN (FULLY INSURED PLAN EMPLOYERS DO NOT COMPLETE PART III) 1094-C: PART I ALE MEMBER TRANSMITTAL 11

12 1094-C: PART II ALE MEMBER INFORMATION 1094-C: PART III ALE MONTHLY MEMBER INFO 12

13 1094-C: PART IV AGGREGATED ALE GROUP If Line 21 is checked Yes, include the name(s) & EIN(s) of up to 30 of Aggregated ALE Group members INFORMATION REQUIRED FOR 1095-B & 1094-B 13

14 1095-B: PART I-III SELF-INSURED NON-ALE Complete Part I & III only. Part II is not applicable to self-insured employers 1095-B: PART IV SELF-INSURED NON-ALE 14

15 1094-B: TRANSMITTAL FOR SELF-INSURED NON-ALE WHAT CAN I DO RIGHT NOW TO PREPARE? Determine whether your organization will have to file based on the 50+ full-time employee & equivalent threshold Identify & coordinate filing for controlled group relationships Learn the fundamentals & identify what forms apply to my organization Understand data requirements What information will I need to collect? Where am I going to get it? Start collecting it on a monthly basis Develop a game plan Communicate with employees 15

16 BKD S SOLUTION TO ACA INFORMATION REPORTING Informational brochures for self-insured & fully insured employers In-depth information reporting playbook ACA 1094/1095 form filing solution Guide you through complexities of the new reporting requirements Help you collect data & upload your data to a processing application Provide a secure cloud-based application that allows users to manually modify data on the forms Provide validation steps prior to submission Print & mail recipient forms & electronically transmit forms to IRS BKD TECHNOLOGIES ERP MODULES FOR ACA COMPLIANCE Dynamics GP & SAGE HRMS software users Additional modules must be added & configured correctly to track employee status, offering of coverage & process 1095/1094 forms with IRS BKD Technologies can help with software upgrade & verify system is configured correctly For assistance contact Tim Beranek, Partner Sage Software & Intacct leader [email protected] Scott Brouillette, Principal Dynamics GP & CRM leader [email protected] 16

17 QUESTIONS CONTINUING PROFESSIONAL EDUCATION (CPE) CREDITS BKD, LLP is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: The information in BKD webinars is presented by BKD professionals, but applying specific information to your situation requires careful consideration of facts & circumstances. Consult your BKD advisor before acting on any matters covered in these webinars 17

18 CPE CREDIT This presentation may be eligible for CPE credit upon verification of participant attendance For questions or comments regarding CPE credit, please BKD Learning & Development Department at THANK YOU FOR MORE INFORMATION // For a complete list of our offices and subsidiaries, visit bkd.com or contact: Robert W. Conner, CPA // National Tax Assistant Director [email protected] // Jim Ashley, CPA // Senior Manager [email protected] //