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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 young business leader, Jason has been the communications pulse for a number of organizations, including Paycom. A featured writer on human capital management technology, leadership and the Affordable Care Act, Jason launched Paycom’s blog and social media channels, helping empower organizations around the nation. Jason is attuned to the needs of businesses and recently 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.

ACA Form Deadline extension march-2

Another Extension for the ACA Forms

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IRS Announces Form Furnishing Deadline Extension

Another year brings another extension for the Affordable Care Act (ACA) forms, but this time the continuation only applies to furnishing Form 1095-B and 1095-C to your employees. Internal Revenue Service (IRS) Notice 2016-70, issued Friday, November 18, extended the deadline to furnish ACA forms to employees from January 31, 2017, to March 2, 2017.

As a result of this automatic extension, the IRS will not allow any additional extensions to be applied to the new due date. While the date to furnish the forms changed, the date to file with the IRS remains unchanged. Paper forms are still due on February 28, 2017, while electronic submissions are to be submitted by March 31, 2017.

What changes

This notice also extends the “good faith effort” to comply with the information reporting requirements under sections 6721 and 6722. This relief only applies to the information reporting requirements detailed in Sections 6055 and 6056 of the Internal Revenue Code, not the timeliness of the form submission or the failure to furnish a return.

What remains the same

While these changes provide relief for the timing of furnishing forms, other compliance regulations that were finalized in the fall of 2016, such as offering health coverage to 95 percent of full-time employees and their dependents and the omission of the “Qualifying Offer Method Transition Relief” box, remains unchanged.

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.


hlively

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.

master compliance

3 Ways Your HR Team Can Master Compliance

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3 Ways Your HR Team Can Master Compliance

Complex rules, weighty administrative responsibilities, zero margin for error: When it comes to complying with employment legislation, the burden for U.S. businesses — both large and small — is substantial.

Small and medium-sized businesses in particular must manage their resources wisely, and can find it increasingly difficult to allocate the staff – and the time – to manage all of their company’s obligations for complying with today’s labor legislation. Larger businesses, with thousands of workers employed across state lines, face the challenge of ensuring HR teams are following the right rules. It’s no wonder managing compliance can feel overwhelming.

But it doesn’t have to be. Implementing a few best practices can make it easier to master the growing compliance burden and protect your company.

Here are three best practices to help you master compliance.

1. Automate Your Compliance Processes

Not only are government agencies producing a ton of rules and regulations, but businesses also have to deal with the mounting complexity of those regulations. The Affordable Care Act (ACA) is a perfect example. It’s one of the most complex pieces of federal legislation ever conceived, and despite many HR leaders’ best efforts, the nuanced nature of government regulations, like ACA, makes manually tracking and storing information time consuming and precarious.

Enter automation.

Automation improves a business’s efficiency and takes some of the guesswork out of complex processes. Specifically, the right system should be able to automate tasks like tracking garnishment payments and sending required COBRA correspondence. Through automation, businesses gain something truly valuable — peace of mind.

2. Proactively Find Areas of Risk

The risk of noncompliance is real and felt most notably in steep costs. Take the Fair Labor Standards Act as an example.

Not only do businesses have to contend with rising penalties associated with noncompliance, but class-action and wage-and-hour lawsuits add a painful one-two punch. These blows can leave marks. In fact, according to a report from Seyfarth.com, there has been a staggering 115 percent increase in value of the top 10 wage-and-hour class-action settlements since 2014.

But wait, there’s more: Litigation lawyers with splashy ads and the ubiquity of online information actually encourage employees to file claims against their employers. Additionally, the U.S. Department of Labor’s Wage and Hour Division has increased the number of investigations by 35 percent in the last six years. These investigations are launched independently of employee complaints.

With the odds seemingly stacked against businesses, foresight and planning is crucial. Businesses that have the ability to quickly audit their workforce by gathering easily accessible and accurate data can proactively manage their risk of noncompliance and find opportunities for improvement.

3. Be the Ultimate Resource for Your C-Suite

Big regs can mean big changes for businesses. Take, for example, recent changes to overtime regulations. On its face, overtime expansion looks like a simple question of time and labor. The solution may seem simple as well: Cut a few hours here or reassign a few duties there in order to avoid increased labor costs. However, because the salary threshold essentially has doubled, controlling overtime costs can require many changes to how a large percentage of a company’s workforce is paid and scheduled.

That’s why it’s so important to provide your C-suite with the data and information it needs to make the best decisions for your company.

Experienced executives rely on key event alerts; intuitive, automatic reporting; and legislation overviews to keep them at the top of their game. Additionally, those types of tools give HR leaders crucial time to prepare solutions and points of reference when presenting recommendations in the boardroom.

 

Get a free executive summary on the challenges businesses face in today’s regulatory environment 

 

Just as the Industrial Revolution’s spinning jenny replaced the laborious job of hand-spinning wool and cotton, HR technology can drastically improve a business’s efficiency and output. Automation features like push reporting allow companies to schedule reports for things like expiring employment authorization documents and ACA status changes.

We know when it comes to leading your company through intensifying government regulations, you don’t simply want to make it — you want to master it. With these tips and the right HR technology, you can be well-positioned to do just that.

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.


Katy Fabrie

by Katy Fabrie


Author Bio: Katy Fabrie is a Marketing Specialist at Paycom where she assists with executing integrated marketing campaigns. With extensive experience in both writing and research, Katy enjoys crafting content that helps HR professionals develop strategies to reach their goals. Katy has created both digital and printed content for a myriad of local and national companies, and she enjoys continually expanding her HR knowledge base. Outside of work, Katy enjoys reading, running and spending time with her husband, Colby, and dog, Fox.

Paper work

IRS Releases Final, Updated 2016 ACA Forms

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IRS Releases Final, Updated 2016 ACA Forms

By now, it’s likely you’re aware that several forms of transition relief from the Affordable Care Act (ACA) that were available in 2015 have expired, and only limited relief continues to apply in 2016.

As a result, the Internal Revenue Service has removed references to 2015 transition relief from 2016 Forms 1094- and 1095-C. It’s important that employers understand how these changes affect the way they will complete 2016 forms and provide data to the IRS.

In summary:

  1. Transition Relief check box removed

Employers no longer will be able to select “The Qualifying Offer Method Transition Relief” box on Form 1094-C, or use codes 1I and 2I to complete Forms 1094 and 1095-C. In 2016, employers will use new codes 1J and 1K to show they offered minimum essential coverage to employees, their spouses and dependents for all 12 months of the calendar year.

  1. Safe harbor increases to 95 percent

Applicable large employers (ALEs) now must offer health care coverage to 95 percent of their full-time employees in order to check “yes” in Part III of Form 1094-C.

  1. Full-time reminder added to Form 1094-C

ALEs with 50 or more full-time or full-time-equivalent employees must follow guidelines in 2016. On Form 1094-C, the phrase “Section 4980H” was added to remind filers that the 30-hour-per-week definition of “full-time employee” applies for purposes of completing Part III of Form 1094-C.

What you can do

While these changes seem insignificant, not taking them into account when completing your ACA reporting could result in noncompliance with increasingly strict requirements. This, combined with elevated penalties and fast-approaching 2017 reporting deadlines, may have you looking for a payroll provider who can assist you with ACA compliance. If so, choose a company that can file Forms 1094/1095-B or -C on your behalf and offers ongoing monitoring and education features to help you proactively manage ACA compliance.

 

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.


amy.double

by Amy Double


Author Bio: Amy, a tenured professional in sales and marketing with over 10 years of experience, is dedicated to creating content focused on helping organizations achieve their business goals. As an experienced writer, Amy is committed to researching and blogging about topics that affect businesses across multiple industries, including manufacturing, hospitality and more. Outside of work, Amy enjoys reading, entertaining and spending time with family.

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