It is likely that your organization will be affected by new reporting standards for Health Plan Coverage. Although the new reporting standards went into effect in 2015, official reports will not be due until January of 2016. In this article, we will look at things you can do now to help prepare you for completing these reports.
These new filing standards will apply to two types of employers:
- If you are an employer with self-insured health plans and are not considered a large employer (over 50 full-time equivalent employees), you are required to issue Form 1095-B to every covered employee and file copies with the Internal Revenue Service (IRS).
- If you are considered a large employer, you are required to issue a Form 1095-C to every employee and file copies with the IRS.
The following information will be required to report for each employee receiving a 1095-C:
- What health care coverage was offered or not offered the employee
- What amount was paid by the employee for their portion of the lowest-cost monthly premium? This applies to self-only minimum value coverage.
- Should an employee not be offered insurance at any time within the calendar year, you must indicate the reasoning using the corresponding code. For instance, if the employee was not employed in that month (2A) or employed at a part time level (2B).
A list of codes is available at www.irs.gov/instructions/i109495c/index.html and should be reviewed to ensure all form requirements are being met throughout the year.
Self-insured Employer Reporting
Large employers will report using Form 1095-C, part 3. If you are not considered a large employer, use 1095-B.
Any employer offering a self-insured health plan must provide the following information:
- A list of each employee, including spouse, dependents, or others covered under the plan who were given coverage for a minimum of one month throughout the year
- Date of birth and Social Security number for each covered individual
- Each month for which the person was covered
See www.irs.gov/instructions/i109495b/index.html for the comprehensive requirements of Form 1095.
Transitional Relief for Large Employers
Transitional relief has been provided by the IRS for a variety of employer and plan situations including penalties for incomplete or incorrect returns. Generally, the relief will provide extra time to develop processes for data collection in compliance with the new requirements. However, no relief will be extended to employers who can show a concerted effort to collect and provide required information. Transitional relief will be extended in specific circumstances, some of which are detailed below:
- If by December 27, 2012, your health plan was not on a calendar year, you may be eligible for transitional relief for the first calendar months of 2015. Please note you must have offered affordable coverage providing minimal benefits by the first day of 2015.
- If your company has wavered at the 50 full-time employee (FTE) mark, you may be eligible for transitional relief. You may use a six consecutive month measuring period in 2014 to assess whether you are considered a large employer.
- The requirement states that you must offer coverage for all days within the month. For January 2015, if you provided coverage before the first payday, you will be considered as offering coverage as of January 1, 2015.
- If you did not offer coverage in 2013 or 2014 for dependents, you will not be subject to shared responsibility liability in 2015. However, you must prove that you are taking steps to offer dependent coverage.
- Should you have more than 50 but fewer than 100 FTE, for 2015, you are not held liable for the shared responsibility payment. However, you must show that you:
- Have fewer than 100 FTE employees
- Have not reduced hours of service or workforce between 2/9/2014 and 12/31/14
- Are maintaining previously offered coverage. Forms 1094-C and 1095-C will verify these requirements.
- Please note: An employer will have a reduced penalty if they have over 99 FTE employees and have offered affordable minimum coverage to at least 70% of its employees.
The Affordable Care Act requirements have had their challenges. Concerns have been identified, and requirement changes have been made. However, it is advisable to prioritize compliance and planning to adhere to these regulations. Reports to the IRS and employees are imperative to the compliance process and should be followed.
Here at RBP Methods, we would love to help support you in any way we can. We recognize the unique challenges that you face. Whether your goals are financial or cause-related, we offer the tools and services needed to carry out your mission. Contact us for more information.