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Talking Turkey Re ACA Reporting Requirements

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Page 1: Talking Turkey Re ACA Reporting Requirementsshared.littler.com/tikit/2014/14_Webinars/PDF/11.18.14_Presentation.pdfTalking Turkey Re ACA Reporting Requirements . Judith Wethall, Esq

Talking Turkey Re ACA Reporting Requirements

Page 2: Talking Turkey Re ACA Reporting Requirementsshared.littler.com/tikit/2014/14_Webinars/PDF/11.18.14_Presentation.pdfTalking Turkey Re ACA Reporting Requirements . Judith Wethall, Esq

Judith Wethall, Esq. Shareholder Chicago Office

Page 3: Talking Turkey Re ACA Reporting Requirementsshared.littler.com/tikit/2014/14_Webinars/PDF/11.18.14_Presentation.pdfTalking Turkey Re ACA Reporting Requirements . Judith Wethall, Esq

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

Page 4: Talking Turkey Re ACA Reporting Requirementsshared.littler.com/tikit/2014/14_Webinars/PDF/11.18.14_Presentation.pdfTalking Turkey Re ACA Reporting Requirements . Judith Wethall, Esq

Overview

• Final rules on reporting were issued March 5, 2014

• Reporting is effective 2016, for data accumulated in 2015

Page 5: Talking Turkey Re ACA Reporting Requirementsshared.littler.com/tikit/2014/14_Webinars/PDF/11.18.14_Presentation.pdfTalking Turkey Re ACA Reporting Requirements . Judith Wethall, Esq

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

Page 6: Talking Turkey Re ACA Reporting Requirementsshared.littler.com/tikit/2014/14_Webinars/PDF/11.18.14_Presentation.pdfTalking Turkey Re ACA Reporting Requirements . Judith Wethall, Esq

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)

Page 7: Talking Turkey Re ACA Reporting Requirementsshared.littler.com/tikit/2014/14_Webinars/PDF/11.18.14_Presentation.pdfTalking Turkey Re ACA Reporting Requirements . Judith Wethall, Esq

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

Page 8: Talking Turkey Re ACA Reporting Requirementsshared.littler.com/tikit/2014/14_Webinars/PDF/11.18.14_Presentation.pdfTalking Turkey Re ACA Reporting Requirements . Judith Wethall, Esq

6055 Exceptions

• Employers participating in a fully insured arrangement

• HSAs, HRAs • Coverage in connection

with government programs • Wellness plans if part of

MEC

Page 9: Talking Turkey Re ACA Reporting Requirementsshared.littler.com/tikit/2014/14_Webinars/PDF/11.18.14_Presentation.pdfTalking Turkey Re ACA Reporting Requirements . Judith Wethall, Esq

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

Page 10: Talking Turkey Re ACA Reporting Requirementsshared.littler.com/tikit/2014/14_Webinars/PDF/11.18.14_Presentation.pdfTalking Turkey Re ACA Reporting Requirements . Judith Wethall, Esq

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

Page 11: Talking Turkey Re ACA Reporting Requirementsshared.littler.com/tikit/2014/14_Webinars/PDF/11.18.14_Presentation.pdfTalking Turkey Re ACA Reporting Requirements . Judith Wethall, Esq

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

Page 12: Talking Turkey Re ACA Reporting Requirementsshared.littler.com/tikit/2014/14_Webinars/PDF/11.18.14_Presentation.pdfTalking Turkey Re ACA Reporting Requirements . Judith Wethall, Esq

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

Page 13: Talking Turkey Re ACA Reporting Requirementsshared.littler.com/tikit/2014/14_Webinars/PDF/11.18.14_Presentation.pdfTalking Turkey Re ACA Reporting Requirements . Judith Wethall, Esq

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

Page 14: Talking Turkey Re ACA Reporting Requirementsshared.littler.com/tikit/2014/14_Webinars/PDF/11.18.14_Presentation.pdfTalking Turkey Re ACA Reporting Requirements . Judith Wethall, Esq

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)

Page 15: Talking Turkey Re ACA Reporting Requirementsshared.littler.com/tikit/2014/14_Webinars/PDF/11.18.14_Presentation.pdfTalking Turkey Re ACA Reporting Requirements . Judith Wethall, Esq

Combined Reporting (6055/6056)

• Self-funded ALEs can combine • Use Form 1095-C only and

complete both section 6055/6056

Page 16: Talking Turkey Re ACA Reporting Requirementsshared.littler.com/tikit/2014/14_Webinars/PDF/11.18.14_Presentation.pdfTalking Turkey Re ACA Reporting Requirements . Judith Wethall, Esq

Questions & Answers

Page 17: Talking Turkey Re ACA Reporting Requirementsshared.littler.com/tikit/2014/14_Webinars/PDF/11.18.14_Presentation.pdfTalking Turkey Re ACA Reporting Requirements . Judith Wethall, Esq

Judith Wethall, Esq. Shareholder Chicago Office