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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: A writer, speaker and business leader, Jason has been the communications pulse for a number of organizations, including Paycom where he is the director of public relations and corporate communications. A featured writer on human capital management technology, leadership and the Affordable Care Act, Jason launched Paycom’s blog, webinar platform and social media channels, helping empower organizations around the nation. Jason is attuned to the needs of businesses and helped develop a tool to aid organizations in their pursuit to comply with the ACA; one of the largest changes in healthcare the country has seen. While working in athletics for ESPN and FoxSports, Jason learned the importance of hard work and branding. In his free time he enjoys adventuring with his family, reading and exploring new areas to strengthen his business acumen.

IRS Continues to Enforce Affordable Care Act

IRS Continues to Enforce Affordable Care Act

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The IRS recently released an information letter indicating that the IRS continues to enforce the Affordable Care Act (ACA).

Dated June 30, Letter 2017-0010 was sent to a member of Congress who reached out to the IRS at the request of a constituent, a tax-exempt entity concerned it may owe an employer shared responsibility payment (ESRP) because it did not comply with the ACA rules on offering health insurance to its employees, for both financial and religious reasons.

The letter first provides a brief summary of the circumstances that might lead to a large employer owing an ESRP, and notes that there is no provision in the ACA that provides for the waiver of an ESRP.

The letter then addresses the effect of the president’s Jan. 20 executive order on the enforcement of the ACA. Titled “Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal,” the order directed federal agencies to exercise discretion permitted to them by law to reduce potential burdens imposed by the ACA.

However, it did not change the health care law. The legislative provisions of the ACA are still in force until changed by Congress; therefore, taxpayers remain required to follow the law and pay what they may owe.

For more information on the executive order and the current tax filing season, visit https://www.irs.gov/tax-professionals/aca-information-center-for-tax-professionals.

What This Means for Employers

Since Congress has not yet passed a bill that would repeal the ACA, and Republicans have struggled to draft a bill that would receive majority support, employers should use caution and plan to comply with the law’s requirements unless and until the ACA is repealed and any new law’s provisions actually go into effect. Continued compliance may be required for a transition period, following passage of an ACA repeal bill, depending on the language of that legislation.

 

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Posted in ACA, Blog, 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.

ACA Awaits Repeal or Repair

ACA Awaits Repeal or Repair

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ACA Awaits Repeal or Repair

After his electoral win in November, President Donald Trump, buoyed by Republican majorities in the House and the Senate, vowed to act quickly to repeal and replace the Affordable Care Act (ACA). Pres. Trump has now been in office for a month, and Republicans have not yet voted to repeal the ACA, and have not agreed upon a potential replacement, leaving the date of “repeal and replace” somewhere in the uncertain future. stethoscope

Early strategies

When the current Congress convened in January, it moved quickly to begin the “repeal” portion of “repeal and replace” by passing a budget resolution. Because the GOP does not have a filibuster-proof majority in the Senate and cannot count on votes from Democrats to repeal the ACA, Republicans have decided to utilize a procedure known as budget reconciliation to dismantle it.

By using this procedure, Congress can pass a bill to repeal the ACA with a simple majority in the Senate. The reconciliation instructions in the budget resolution directed various committees to come up with proposals to repeal the ACA and submit them to the budget committees of the House and Senate. The reconciliation proposals would then be crafted into a bill by the budget committees, and the reconciliation bill would then need to pass both the House and the Senate before being signed by the President.

Potential outcomes

However, the provisions of the bill passed this way must target elements of the ACA that have a federal budgetary effect. Therefore, the ACA provisions that allow children to stay on their parents’ insurance through age 26 and the requirement that insurers cover preexisting conditions could not be eliminated using this procedure. Nor could the individual and employer mandates be eliminated in this way, but the amounts of the penalties could be reduced to zero, eliminating them in all but name.

Repeal or repair?

Republicans originally called for reconciliation proposals to be submitted to the budget committees by January 27, but that date has come and gone. Congressional Republicans continue to work on “repeal and replace,” but many of them have begun talking about “repair” of the ACA, rather than repeal, as they recognize the difficulty of legislating in this area.

In an interview with Fox News’ Bill O’Reilly on February 5, President Trump said that replacement could take until 2018.

O’Reilly asked “Can Americans in 2017 expect a new health care plan rolled out by the Trump administration this year?”

Trump responded, “We’re going to be putting it [the new healthcare plan] in fairly soon, I think that … by the end of the year at least the rudiments but we should have something within the year and the following year.”

Employer mandates remain in place

One thing that has become clear during the first month of the Trump presidency is that repealing the ACA is a much tougher prospect than many had thought. Despite the uncertainty with regard to the long-term future of the ACA, the current reality is that the ACA and the employer mandate remain the law of the land, and employers should continue to comply with the law’s requirements. Applicable Large Employers should file IRS Forms 1094 and 1095 no later than the March 31 if filing electronically, or February 28, if filing paper forms. Forms 1095-C must be furnished to employees no later than March 2. Large employers should continue to comply with the employer mandate, measure their full-time employees, and offer minimum essential coverage providing minimum value to those employees and their dependents.

Paycom will continue to monitor executive and Congressional action regarding the ACA closely and stands ready to help our clients maintain compliance.

 

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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.

6 Compliance Changes to Check in 2017

6 Compliance Changes to Check in 2017

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Compliance Deadlines and Issues to Watch in 2017

Employers can expect developments  in 2017 related to the Fair Labor Standards Act (FLSA), the Affordable Care Act (ACA), Equal Employment Opportunity Commission (EEOC) requirements and several other workplace regulations concerning compliance. Here’s a closer look.

 

  1. Fair Labor Standards Act

On Nov. 22, 2016, Judge Amos L. Mazzant III of the U.S. District Court for the Eastern District of Texas issued an injunction delaying the effective date of the new overtime rule. The rule would have raised the minimum salary threshold for exempt executive, administrative and professional employees to $913 per week, from $455 per week and the minimum annual salary threshold for highly compensated employees to $134,004, from $100,000.

How long the injunction will remain in place – and the fate of the rule – is anyone’s guess. Meanwhile, employers should adhere to current FLSA requirements and keep an eye out for the outcome of the Department of Labor’s current appeal.

 

  1. Affordable Care Act

Although the leadership in the House of Representatives currently is attempting to repeal ACA, for now, employers still remain responsible for all ACA tracking and reporting requirements. The deadline for issuing ACA forms 1095-B and -C to employees has been extended from Jan. 31, 2017 to March 2, 2017. However, the due date for filing ACA forms with the Internal Revenue Service (IRS) is unchanged. For 2016 tax year, applicable large employers must:

  • Submit paper forms 1094-B and -C and 1095-B and -C by Feb. 28, 2017

 

  • Submit electronic forms 1094-B and -C and 1095-B and -C by March 31, 2017

 

The IRS has extended the “good faith effort” penalty waiver to 2017. Employers who submit inaccurate or incomplete reporting information may be relieved from penalties, as long as they can show they made a “good faith effort” to comply with the ACA’s requirements.

Note that although the 40-percent “Cadillac” tax on high-cost employer health plans has been delayed until 2020, employers should consider assessing the impact of the tax on future business goals now. Once the impact is understood, a feasible strategy can be put in place.

 

  1. Equal Employment Opportunity Reporting

The EEOC has revised the Employer Information Report (EEO-1) to include collecting pay data from employers, including federal contractors, with over 100 employees.

Under the original proposal, employers would submit their annual EEO-1 report – which would include W-2 pay data and hours worked – to the Joint Reporting Committee by September 30 of each year. However, the EEOC has issued an updated proposal that would move the due date for the 2017 report from Sept. 30, 2017 to March 31, 2018. In subsequent years, the deadline will be March 31.

Be sure to monitor the revisions to the EEO-1 report, and prepare a strategy for implementation in case the changes are enacted.

 

  1. Citizenship and Immigration Services Reporting

U.S. Citizenship and Immigration Services recently updated Form I-9. After Jan. 21, 2017, employers must start using the new form.

 

  1. Minimum Wage and Paid Sick Leave

Many states, cities and counties have approved minimum wage increases and mandatory paid sick leave, some of which will take effect in 2017.

 

  1. Federal Contract Workers

The minimum wage for federal contract workers increases to $10.20 per hour Jan. 1, 2017. Certain federal contractors also must provide their employees with up to seven days of paid sick leave per year.

Staying ahead of potential and actual regulatory changes is easy with an HR and payroll system that generates the necessary forms and enables electronic filing to simplify reporting. It’s also important to partner with an HR technology provider who stays abreast of tentative regulatory matters and quickly updates their system accordingly, so that you have the right tools for any changes.

 

DISCLAIMER: The information provided in this blog is for general informational purposes only. Accordingly, Paycom and the writer of the above content do not warrant the completeness or accuracy of the above information. It does not constitute the provision of legal advice, tax advice, accounting services, or professional consulting. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal or other professional services.

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Posted in ACA, Blog, Compliance, Featured, FLSA

Heidi Lively

by Heidi Lively


Author Bio: Heidi Lively serves as Paycom’s Additional Business Manager, where she focuses on the compliance and service of additional business products. Previously, she served customers in the Paycom Service Department where she quickly rose through the ranks to earn a team leader position. Having performed in a leadership position for a number of years, Heidi has been able to cultivate and influence others through Paycom’s leadership initiatives. Heidi earned her bachelor’s degree from the University of Central Oklahoma.

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