talking turkey re aca reporting...
TRANSCRIPT
Talking Turkey Re ACA Reporting Requirements
Judith Wethall, Esq. Shareholder Chicago Office
Overview
• New tax reporting requirements are the foundation of IRS enforcement of various tax provisions of the ACA – Individual mandate (IRC section 5000A)
– Employer mandate (IRC section 4980H)
– Premium tax credits (“PTCs”) (IRC section 36B)
• Reporting requirements largely focus on different ACA provisions – IRC section 6055 – Individual mandate
– IRC section 6056 – Employer mandate
Overview
• Final rules on reporting were issued March 5, 2014
• Reporting is effective 2016, for data accumulated in 2015
Timing of Reporting
• Returns to IRS by 3/31/2016 (or 2/28 if filing by paper)
• Statements due to employees by 1/31/2016
• These dates are true for calendar and non-calendar year plans
6055 Reporting
• Provides employees and IRS with information regarding MEC (minimal essential coverage) and whether the INDIVIDUAL satisfies the individual mandate
• Applies to: – Insurers
– Self-funded medical plans (regardless of the number of employees)
6055 Reporting
Data to Report Data Not to Report Name, address and EIN of reporting entity
Name, address and SSN of “responsible individual”
If the “responsible individual” is not enrolled in the plan, no need to report SSN
Name and SSN of each covered individual
Months of individual was covered Don’t have to report exact dates, just months
For insured plans, the EIN of employer sponsoring the plan
No need to add portion of premiums paid by employer
6055 Exceptions
• Employers participating in a fully insured arrangement
• HSAs, HRAs • Coverage in connection
with government programs • Wellness plans if part of
MEC
6055 Reporting
• Each entity in a controlled group must report separately, BUT
• One member can report for the whole group
• Third party may report, but liability is with employer
• MEWA – each participating employer must report their own data
• Funds – likely the same, however, funds may take on obligation
6055 Reporting
• Must file electronically if reporting entity has at least 250 individuals
• File on Form 1095-B • Forms and
instructions are available now
• Individual statements to participants (no requirement to provide statements to spouses, dependents)
• Electronic delivery permitted BUT must have affirmative consent from participant
• Permit truncated SSN
6055 – Penalties
• Very generally, $100/return with a maximum of $1.5 million
• Waiver of penalties available if failure is due to reasonable cause
• Penalties reduced if corrected by 8/1
6056 Reporting
• “ALE Reporting” – Applicable large
employer • On average employs 50
or more full time employees
• 2015 – 100 or more full time employees
– Applies to each ALE member – even though ALE determination is made on the aggregate
• Dual Purpose: – Employer mandate
– Subsidy eligibility
6056 Reporting
• Report: – Name, address,
employer EIN,
– Name telephone number of the ALE contact person
– Calendar year for which information is reported
– Certification as to offer- by month
• Report – Each FT employee’s
share of the lowest cost premium for self-only coverage by calendar month
– Number of FT employees for each month during the year
– SSN for each FT employee offered coverage
6056 Reporting
• Alternative Filing Methods: – “Qualifying Offers” – all months of the year
and 9.5% of federal poverty line to spouses and dependents
– 98% Offers – – Between 50-100 FT employees (2015 only)
Combined Reporting (6055/6056)
• Self-funded ALEs can combine • Use Form 1095-C only and
complete both section 6055/6056
Questions & Answers
Judith Wethall, Esq. Shareholder Chicago Office