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Companies with Employer-Sponsored Health Plans Must Still Notify Employees of Exchanges

Many U.S. employers offer health insurance coverage to their employees and have been doing so long before the Affordable Care Act (ACA) was signed into law in March of 2010. However, these employers may still be impacted by ACA regulations including the requirement to notify employees of health insurance exchanges regardless of the quality of their own employer-sponsored health plans.

New guidance on exchange notifications required by the ACA has recently been issued by the Department of Labor (DOL) in Technical Release 2013-02.

Beginning October 1, 2013, employers subject to the Fair Labor Standards Act (FLSA) will be required to provide each employee a written notice informing them of their health coverage alternatives offered through the Health Insurance Marketplace, also known as the exchange. Employees must be notified within 14 days of the time of hiring, and current employees must be notified no later than October 1, 2013.

The DOL has provided model language for the notification on their website at http://www.dol.gov/ebsa/healthreform/. There is a model notice for employers who offer health insurance and a different model notice for those who do not offer health insurance coverage.

The Marketplace is designed to help employees find health insurance that meets their needs and fits their budget with one-stop shopping for finding and comparing private health insurance options. If their employer-sponsored coverage does not meet minimum requirements as set forth by the ACA, they may be eligible for a tax credit that would help them save money on their health insurance premiums through the Marketplace.

Employers who have employees who qualify for a tax credit to buy coverage through the Marketplace could be subject to penalties. Watch for our upcoming ACA blog post on “ACA Penalties: Insurance Inadequacies Can Cost You”  and signup for our webinar – Think Your Business is ACA Compliant? – to learn more.



Author Bio: Newman Wells is a writer, designer and entrepreneur with over 20 years of corporate marketing experience. Passionate about B2B marketing, Newman Wells specializes in helping businesses define their value propositions by simplifying technical jargon for easier-to-digest messages that drive sales. She has spent the last two decades building successful marketing departments from the ground up and has been Paycom's director of marketing since 2005.

3 ACA Reporting Alternatives

3 ACA Reporting Alternatives Unraveled

For many organizations, the employer mandate and the reporting requirements of the Affordable Care Act (ACA) loom. Employers want to ensure they will be in compliance come January 2016, when the required forms are due to their full-time employees and the Internal Revenue Service.

Yet many organizations remain confused by the law’s many complexities, especially those related to the reporting provisions. In fact, two-thirds of business executives who have attended Paycom’s ACA webinars in the past four months reported they are not ready to comply with the 2015 reporting requirements!

As staggering as that statistic is, it is important that organizations understand options exist for ACA reporting. You might be surprised to learn which method is best suited for your organization.

Who’s Set to Report?
Starting this year, Applicable Large Employers (ALEs) – organizations with 50 or more full-time or full-time-equivalent employees – will be held to the mandatory filing, which reports the details of health coverage offered to those employees.

The ACA’s “general reporting” method is completing, in its entirety, IRS Form 1095-C, Employer-Provided Health Insurance Offer and Coverage Insurance. This form must be filed with the IRS for every employee determined to be full-time for at least one month during the calendar year. Additionally, employers must provide either a copy of Form 1095-C or an alternate statement to affected employees by Jan. 31 of the year following the year the insurance was offered.

In an effort to simplify reporting requirements in certain situations, the IRS now allows three optional alternative methods:
1. The Certification of Qualifying Offer
2. The Simplified Statements for 95 Percent Offer
3. The 98 Percent Offer

The Certification of Qualifying Offer
This states that in lieu of Form 1095-C, eligible employers are allowed to certify that they extended a “qualifying offer” of health care coverage to employees, as long as the offer provided minimum essential coverage to them, their spouses and dependents, and that the cost of the coverage did not exceed 9.5 percent of the federal poverty level for employee-only coverage.

This report will include the name, address and Social Security number of each full-time employee, along with the indicator code of “1A” from line 14 of Form 1095-C. This code signifies that the employee received a qualifying offer for all 12 months; no other details are required.

The information provided to employees through either a copy of the Form 1095-C or a general statement in a format “prescribed by the IRS” must state that:

1. the employees (plus any spouse and/or dependents) received a qualifying offer for all 12 months of the year
2. and therefore, they generally are ineligible for a premium tax credit for all of those 12 months.

Most employers wishing to use this alternative method will have to furnish a mixture of simplified and general reports to their workers and the IRS, as not all employees will have been with the company for the full, 12-month span.

However, it is important to note that organizations will not know until the end of the year whether simplified reporting can be used for any individual employee; therefore, it is important to maintain records of ACA-required data – affordability, minimum coverage offered and employee full-time status – in order to ensure compliance.

The Simplified Statements for 95 Percent Offer
Available for 2015 only, this alternative allows certain employers to provide a “general statement” in lieu of filing Form 1095-C. They must certify on Form 1094-C that they have made qualifying offers to at least 95 percent of their full-time employees, their spouses and dependent(s).

The information provided to employees through a “general statement” must be in a format “prescribed by the IRS” and must state that:

1. the employees (plus any spouse and/or dependents) received a qualifying offer for all 12 months of the year
2. and therefore, they generally are ineligible for a premium tax credit for any of those 12 months.

These statements may vary, depending on whether the employee received a qualifying offer for all, some or none of the months. Thus, if the qualifying offer did not apply to an employee for the entire 12 months, the statement likely will inform them that any of the aforementioned entities may be eligible to claim a premium tax credit for any month in which a qualifying offer was not made.

Additionally, the statements must supply a contact name — which can be a member of the ALE or a third-party administrator — and telephone number, should an employee wish to call for additional information.

The 98 Percent Offer
For employers who offer qualifying coverage to at least 98 percent of their full-time employees, this third reporting alternative is available. It does not excuse them from submitting Form 1095-C, but does allow them to bypass two data points on Forms 1094-C and 1095-C:

  • the month-to-month full-time status of employees
  • and the monthly total of full-time employees.

Employers who offer coverage to “substantially all” of their full-time employees may lessen the burden on themselves to track and record hours of service in order to identify the number of full-time employees for each month. Because Form 1094-C appears to require reporting of members ranked by full-time employees, it isn’t clear whether or not this option is possible for aggregated groups.

Are the General Statements Useful?
For many, the general statement may cause more confusion than it’s worth; it may be simpler for employers to distribute a copy of Form 1095-C.

Also, it is possible that taxpayers may need to enter information from Form 1095-C on their year-end personal income tax returns, so those receiving the general statement may have to contact their HR department to obtain that information. While the IRS has not yet given guidance on the format of these statements, the bureau does require both an employer contact name and phone number for verification purposes.

The Simplified Ending
In closing, the simplified reporting alternatives may prove useful for a number of organizations, but a lot remains up to the interpretation of the law and each business’ ability to anticipate if it will be eligible to use these alternatives. If you are among the two-thirds of businesses not ready to comply with the 2015 reporting requirements, it is in your best interest to talk to a Paycom representative today.



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.

signing forms

Ready or Not, IRS Finalizes ACA Forms

The time has arrived for employers impacted by the eligibility reporting requirements of the Affordable Care Act (ACA), as the IRS officially released the 2014 versions of the final forms and instructions on Feb. 8. Posted were the following forms, which fulfill the reporting requirements under ACA sections 6055 and 6056:

  • Form 1094-B, Transmittal of Health Coverage Information Returns;
  • Form 1095-B, Health Coverage;
  • Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer Coverage Information Returns; and
  • Form 1095-C, Employer-Provided Health Insurance Offer and Coverage.

Applicable large employers (ALEs) – those with 50 or more full-time or full-time-equivalent (FTE) employees – will be held to the mandatory filing; however, some organizations may receive transitional relief based on:

Regardless, all ALEs are required to file these forms with the IRS and provide statements to full-time employees about health coverage, even if the employers are not required to offer affordable coverage that meets minimum essential coverage or value in 2015.

Information reporting is voluntary for 2014, but all ALEs must submit the forms in early 2016 for calendar year 2015. It is anticipated that the IRS will release the 2015 version of the forms by the end of this year.

If you are a Paycom client, the submission and distribution of these mandatory forms can be done easily through the ACA Dashboard. Paycom’s ACA Dashboard streamlines reporting requirements as users can analyze their information to ensure they are in compliance with the new federal guidelines. In addition, the ACA Dashboard can be autopopulated with an employer’s existing data, and this data also can be autopopulated into the required IRS forms. The ACA Dashboard is provided free of charge to all clients; filing of the forms for 2015 can be done on your behalf for a small fee.

ACA-ToolKit



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.

Green highway sign with exit for year 2015

New Year, but Not for ACA’s Non-Calendar-Year Plans

Here we are, kicking off 2015 – the official beginning of the Affordable Care Act’s employer mandate. However, some employers have plan years that don’t begin on Jan. 1 and will not take part in the fun just yet.

Transitional relief provides employers whose plans don’t start on Jan. 1 an opportunity for respite, so long as they meet the requisites below. Employers who fall into this category do not have to comply with ACA requirements until the beginning of their 2015 plan year, as long as their employees are offered affordable, minimum-value coverage from day one of the 2015 plan year.

The following are required in order to qualify for transitional relief.

  1. All plans must have been adopted and legally in effect on or before Dec. 27, 2012. Appropriate documentation, including for the Employee Retirement Income Security Act (ERISA), must have been established by this date.
  2. After Dec. 27, 2012, employers could not have modified the plan-year start dateof non-calendar plans.
  3. The employer must offer coverage to an acceptable percentage of employees, in one of two scenarios:
    1. As of any date in the 12 months ending Feb. 9, 2014, at least 25 percent of employees are covered under the non-calendar-year plan, or
    2. During the non-calendar-year plan during the most recent open-enrollment period ending before Feb. 9, 2014, at least one-third of its employees or 50 percent of its full-time employees were offered coverage.

Provided that each applicable large employer has followed these three requirements, transitional relief is granted. However, all other employers must adhere to the rules and regulations of ACA’s employer mandate, which went into effect Jan 1.

Disclaimer: You should speak to an attorney regarding your specific situation and to determine whether you qualify for this relief.



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.

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