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ACA Reporting Requirements Become Clearer

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While many portions of the federal government’s Affordable Care Act (ACA) have been delayed and/or postponed, the IRS recently released two employer reporting requirements. These rules are seen in Sections 6055 and 6056, and will be reported via Forms 1095-B and 1095-C, respectively. While employers and insurers may report on a voluntary basis for 2014, reporting will be required in 2015.

A review of the most recent changes to the ACA’s employer mandate can be found here. Keep in mind that even if you are not required to follow the Employer Shared Responsibility Payment (ESRP) until 2016, you still must submit information returns beginning in 2015.

Section 6055
This section applies to reporting on minimum essential coverage and provides information that insurers and self-insured sponsors must report.

Section 6056
This section applies to reporting for applicable large employers (ALE) on health insurance coverage offered under employer-sponsored plans. IRS reporting requires employers to provide information about the type of health insurance and the number of employees covered.

The final rules require reporting of the following:

  1. the name, address and Employer Identification Number of the ALE member and the calendar year for which the information is reported;
  2. the name and contact information for the ALE member’s contact person;
  3. certification determining whether the ALE member offered its full-time employees and dependents the opportunity to enroll in minimum essential coverage under the employer-sponsored plan (due by calendar month);
  4. the number of full-time employees for each calendar month during the calendar year (due by calendar month);
  5. the months during the calendar year for which minimum essential coverage under the plan was available to each full-time employee;
  6. each full-time employee’s share of the lowest-cost monthly premium for self-only coverage providing minimum value offered (due by calendar month); and
  7. the name, address and Taxpayer Identification Number of each full-time employee during the calendar year (broken down monthly) during which the employee was covered under an employer-sponsored plan.

Alternative Reporting Available
Certificate of Qualifying Offers – Only Available for 2015 Reporting:
If an employer certifies that it has offered affordable health coverage to at least 95 percent of its full-time employees, including their spouses and dependents, then it can use an alternative method for reporting. Employers falling into this category must complete the IRS Form 1095-C, providing the following:

  • employee names, addresses and Social Security numbers;
  • an indicator code showing a qualifying offer was made for a calendar year or the exact months it was not; and
  • a statement that the information above was provided to the employee. Each statement may vary depending on whether or not the employee received a qualifying offer from the employer for all, some or none of the months in calendar year. Under the reporting requirement, employee statements cannot be provided electronically unless the employee consents to receive it that way.

Certificate of Qualifying Orders:
An alternative to this reporting is possible, provided that the ALE can certify that during each month of the calendar year in which the employee was a full-time employee, the ALE offered minimum essential coverage providing minimum value at an employee cost for employee-only coverage not exceeding the 9.5 percent of the federal poverty threshold to one or more of its full-time employees. The coverage offered must meet the minimum essential coverage to the employee’s spouse and dependents.

Ninety-Eight Percent Offers:
Provided that an ALE certifies it has offered minimum essential coverage that provides minimum value and is deemed affordable to 98 percent of the employees and dependents,  that employer does not have to identify the number of full-time employees. This is only for employers who have Section 6056 reporting responsibilities.

New Reporting Forms
ALEs that provide insured coverage are required to provide only the section of Forms 1094-C and 1095-C that report the specified information required under Section 6056. Entities that are not ALEs or are not reporting as employers will provide the required information as reported in Forms 1094-B and 1095-B.

Final regulations note that the IRS intends to make Forms 1095-C and 1095-B available in draft form in the near future. It further states that an entity may provide either form along with its Form W-2 mailing.

Transition Relief and Filings
IRS Notice 2013-45 moved the effective reporting date to Jan. 1, 2015. Penalties will not be assessed for entities that demonstrate a good-faith effort to comply with the reporting requirements. Furthermore, regulations state specific relief will be given to returns and transmittal statements filed and furnished in 2016, reporting coverage in 2015, which may contain incorrect or incomplete information.

The filings must be submitted to the IRS by Feb. 28 or March 31 if filed electronically of the year following the calendar year in which coverage is provided. Individual statements must be provided by Jan. 31 for the year after which coverage is provided.

Electronic filing of a Form 1095-B or Form 1095-C is required for entities that file at least 250 of either of those forms.

What’s Next?
Employers should be prepared for the upcoming ESRP requirements while also taking steps to be ready to report information required by Sections 6055 and 6056.

With a single application and proprietary software development, Paycom arms its clients with the reporting tools needed to mitigate ACA-compliance exposure as it pertains to reporting requirements.

The content of this blog is intended to keep interested parties informed of legal and industry developments for educational purposes only.  It is not intended as legal opinion or tax advice and should not be regarded as a substitute for legal or tax advice.



Author Bio: Jason Bodin has been the communications pulse for a number of organizations, including Paycom, where he serves as director of public relations and corporate communications. He helped launch Paycom’s blog, webinar platform and social media channels. He aided in the development of Paycom’s tool to assist organizations in complying with the Affordable Care Act, one of the largest changes in health care the country has seen. A graduate of the University of Oklahoma, Bodin previously worked for ESPN and FoxSports. In his free time, he enjoys adventuring with his family, reading and strengthen his business acumen.

ACA ‘Cadillac Tax’ Delayed to 2022

ACA ‘Cadillac Tax’ Delayed to 2022

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The short-term spending bill that ended the government shutdown on Jan. 22 included a small provision that again delayed the Affordable Care Act’s (ACA) “Cadillac tax,” now to 2022.

So nicknamed because it targets employer-sponsored health plans with the most generous level of benefits, the Cadillac tax originally was to take effect in 2018. In 2015, the effective date was pushed to 2020, and now the new bill pushes the effective date two additional years into the future.

When – or if – the Cadillac tax goes into effect, it will impose a 40% excise on the cost of employer-sponsored health coverage exceeding a certain dollar value per employee. The dollar value would have been $10,200 for individual coverage and $27,500 for family coverage in 2018, had the tax not been delayed. The law calls for the amount to be adjusted annually with growth in the consumer price index.

How does this affect Employers?

Employers do not have to contend with the tax for an additional two years. The IRS has not yet issued regulations addressing implementation; with this additional delay, the agency likely will not do so in the near future.

Disclaimer: This blog includes general information about legal issues and developments in the law. Such materials are for informational purposes only and may not reflect the most current legal developments. These informational materials are not intended, and must not be taken, as legal advice on any particular set of facts or circumstances. You need to contact a lawyer licensed in your jurisdiction for advice on specific legal problems.

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Posted in ACA, Blog, Compliance, Featured

Erin Maxwell

by Erin Maxwell


Author Bio: As a compliance attorney for Paycom, Erin Maxwell monitors legal and regulatory changes at the state and federal level, focusing on health and employee benefits laws, to ensure the Paycom system is updated accordingly. She previously served as assistant general counsel at Asset Servicing Group in Oklahoma City. She holds a bachelor’s degree from the University of Central Oklahoma and a J.D. from the University of Oklahoma. Outside of work, Maxwell enjoys politics, historical mysteries and spending time with her family.

Deadline Extended

Employer Deadline Extended for Furnishing 2017 ACA Forms

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Distribution of 2017 Affordable Care Act (ACA) Forms 1095-B or -C to your employees has been extended.

As issued in Notice 2018-06, the IRS has extended the deadline from Jan. 31 to March 2. (However, the deadline to provide Forms W-2 and 1099 to employees and contract workers remains as Jan. 31.)

Filing deadlines unchanged

While the deadline to furnish forms was extended, the filing deadlines remain the same: Feb. 28 for paper forms, and April 2 for electronic forms.

IRS Notice 2018-06 emphasizes that employers who do not comply with the due dates for furnishing or filing are subject to penalties under sections 6722 or 6721.

Good-faith transition relief extended

The IRS also announced the extension of good-faith transition relief. This may allow an employer to avoid some penalties if it can show that it made good-faith efforts to comply with the information reporting requirements for 2017.

This relief applies only to incorrect and incomplete information reported on the ACA forms, and not to a failure to file or furnish the forms in a timely manner. Additionally, the IRS stated it does not anticipate extending either the good-faith transition relief or the furnishing deadline in future years.

Contact a trusted tax professional if you have questions on how this may affect your business specifically.

Click here to read more about how the ACA is affect by the new Tax Cuts and Jobs Act.

Disclaimer: This blog includes general information about legal issues and developments in the law. Such materials are for informational purposes only and may not reflect the most current legal developments. These informational materials are not intended, and must not be taken, as legal advice on any particular set of facts or circumstances. You need to contact a lawyer licensed in your jurisdiction for advice on specific legal problems.

Tags: , , , ,
Posted in ACA, Blog, Compliance, Featured

Erin Maxwell

by Erin Maxwell


Author Bio: As a compliance attorney for Paycom, Erin Maxwell monitors legal and regulatory changes at the state and federal level, focusing on health and employee benefits laws, to ensure the Paycom system is updated accordingly. She previously served as assistant general counsel at Asset Servicing Group in Oklahoma City. She holds a bachelor’s degree from the University of Central Oklahoma and a J.D. from the University of Oklahoma. Outside of work, Maxwell enjoys politics, historical mysteries and spending time with her family.

Employers Unaffected by ACA Changes in New Tax Law

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On December 22, President Trump signed the Tax Cuts and Jobs Act. The bill includes a provision that reduces the penalty for not complying with the Affordable Care Act’s (ACA) individual mandate to $0, effectively removing the penalty for individuals who do not have health insurance coverage after the effective date of Jan. 1, 2019.

However, this update will not impact employers, since the law does not remove the employer mandate (the requirement that large employers offer health insurance coverage to their full-time employees or pay a penalty) or the associated employer reporting requirements. Large employers subject to the mandate still face penalties if they fail to comply with either, and the IRS has begun sending out notices with preliminary assessments of the employer shared responsibility penalty for tax year 2015.

Employers subject to the employer mandate should continue to comply and be prepared to file Forms 1094 and 1095 with the IRS in accordance with the normal deadlines.

For the 2017 tax year, the deadlines to provide Forms 1095-C to employees is Jan. 31, 2018.  The deadline to file Forms 1094-C and 1095-C with the IRS is Feb. 28, 2018 if filing paper forms, and April 2, 2018, if filing electronically.

Disclaimer: This blog includes general information about legal issues and developments in the law. Such materials are for informational purposes only and may not reflect the most current legal developments. These informational materials are not intended, and must not be taken, as legal advice on any particular set of facts or circumstances. You need to contact a lawyer licensed in your jurisdiction for advice on specific legal problems.

Posted in ACA, Blog, Compliance, Featured

Erin Maxwell

by Erin Maxwell


Author Bio: As a compliance attorney for Paycom, Erin Maxwell monitors legal and regulatory changes at the state and federal level, focusing on health and employee benefits laws, to ensure the Paycom system is updated accordingly. She previously served as assistant general counsel at Asset Servicing Group in Oklahoma City. She holds a bachelor’s degree from the University of Central Oklahoma and a J.D. from the University of Oklahoma. Outside of work, Maxwell enjoys politics, historical mysteries and spending time with her family.

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