Affordable ble Car Care A Act ct Rep eporti ting g Forms - - PowerPoint PPT Presentation

Affordable ble Car Care A Act ct Rep eporti ting g – Forms

• rms

109 094 & & 1095 095

February 2, 2016 Kathy D. Petrucci & Zachary Davis

614-586-7214 614-586-7235

Schneider Downs ACA Forms 1094 & 1095 Webinar

Firm Overview

Since ce 1956, 956, S Schn chneider D Downs & Co.

• ., I
• Inc. provides a

s accounting, t , tax, x, and bus usiness a advisory y services t to a num number o

• f compani

nies i in n varyi ying ng i ind ndus ustries. – Ra Ranked a as on

• ne of
• f the

he 55 55-lar argest a account nting ing and nd bus usine ness a advisory f y firms i in n th the U U.S.; – Fourth-la largest c certified p publi lic a accounting and nd bus usine ness a advisory f y firm in n Western P PA and nd ni nint nth l largest in n Columb mbus, O OH.; – Fou

• unded i

in 1956 956 with r rapid growth h over t the he past 35 35 years, fr from

• m 50

50 employees i in 1980 980 to nearly 400 400 tod

• day, i

incl cluding 38 38 sha hareholders; – Active ind ndus ustry s y service g group ups inc nclud ude: Manufactu turing, D Distr tributi tion, C Constr tructi tion a and Real Es Esta tate, Aut utomobile D Dealerships, Ene Energy y and nd R Resour urces, Transportat atio ion, n, N Nonprofit it, H Higher E Educat atio ion a n and G Governm nment ntal al Services.

2

Schneider Downs ACA Forms 1094 & 1095 Webinar

About Your Presenters

• Kathy P

Petru rucci is a a tax s share rehol

• lder

r in o

• ur Columbus O

s Ohio o

• ffice. She has 22

2 years o

• f

experi rience i in tax advi visor sory servi vices a s and has e extensi sive e experi rience w work rking with a a diversi rsified number r of indust stri ries, s such a as autom

• motive, i

insu sura rance, m manufacturi ring, transporta tation, and n not-fo for-profit fit. . Educati tion: B.S., A Account unting ng - Otterb rbein C College Mast ster r of Taxation

• n, C

Capital U Universi rsity Law Scho hool

• Zack Davi

vis i s is a a tax m manager i r in our C Columbus Ohio o

• office. He has

s 7 years rs of

• f

experi rience in t tax a advi visor sory servi vices a s and has extensi sive e experi rience w work rking with indust stry sectors

• rs ranging f

from

• m c

const stru ruction

• n, manufacturi

ring, r real estate, h hospi spitality and t technology gy. Educati tion: B.S., A Account unting ng – Case West stern rn R Rese serve U Universi sity Mast sters of Account untanc ncy – Specializing in Taxation

• n, C

Case West stern rn R Rese serve U Universi sity

3

Schneider Downs ACA Forms 1094 & 1095 Webinar

Agenda

• Brief

ef o

• ver

erview o

• f ACA Emplo

loyer S Shared R ed Responsibili lity y requir irement a t and P Penal altie ies

• ACA Repor
• rtin

ting R Requir irement

– Du Due Da Dates – When a and H How to

• File

le – What I Inf nformation is Need Needed ed f for Form R Rep eporting – Form 1 1095 095-C C Prepar aration T Tip ips s & Exam amples – Form 1 109 094-C Pr Prep eparation T Tips – Form 10 1094-B & 1 1095 095-B B Brief ef O Over ervi view – Rep eporting No Non-compli lianc nce P Penalties – Act ction S Step eps

• Q &

& A A

4

Schneider Downs ACA Forms 1094 & 1095 Webinar

Employer Shared Responsibility – IRC 4980H

• The

The ‘e ‘employer shared r d respo ponsib sibil ilit ity’ is t the he re requirement t tha hat Applicable le L Large E Emplo loyers ( (ALE LEs) offe fer healt lth i h insura rance t to the heir fu full ll-time e emplo loyees, an and d their de depe pendents t to ag age 2 26.

– A large em e employer er i is an n em employer er w who has 50 o 50 or more e full ll-time ime emplo loyees, i inclu luding f full ll-time eq e equi uivalen ent em employees ees. – Mus Must l look at ent entities es und under er co common o

• wner

nership a and nd i incl nclude e those em e employees ees i in n the e co count unt! – Ef Effect ective d e date e – 1/ 1/1/ 1/15.

• However, large

ge em employers who have 5 50 – 99 empl ployees ha have been een g given en a an addi ditional year t to c

• comply. Ther

eref efore, t they a are required d to offer er cover erage ge begi ginning in 2016.

Schneider Downs ACA Forms 1094 & 1095 Webinar

Employer Shared Responsibility – IRC 4980H

• Comm

mmon O Ownership hip

– In determ rmining w whethe her a r a company i y is subject t to the Emplo loyer S Share red R Responsibility r y require rement, t , two o

• or

mo more c compan panies t that h have commo mmon o

• wnership

p may ay b be treated a as a single le e emplo loyer – All e ll employees of

• f such c

h com

• mpanies m

must b be cou

• unted i

in the determination

• n o
• f larg

rge e emplo loyer r if f the c compan anie ies f s form a m a controlled g group o p or af affil iliated se service g group u unde der I IRC Sectio ions s §414(b (b), (c (c), (m (m), a and (o (o)

Schneider Downs ACA Forms 1094 & 1095 Webinar

Employer Shared Responsibility – IRC 4980H

Ther ere a e are f e four p primary t y types pes o

• f comm

mmon o n owne nership gro roups:

• Parent

nt-su subsid sidiar iary c contr trolled g grou

• up

– One ne c corpo poration o

• wns

ns directly a at l least 8 80% of the voting po power o

• r value

ue of ano nother corpo poration – All other corpo porations of which 80% o

• f voting po

power or value ue o

• f stock owne

ned b by another memb mber i is i included in t the grou

• up
• Bro

rother-sist ister c contr trolled g grou

• up

– A group up o

• f two or more compa

panies w where f five o

• r fewer common owne

ners (inc ncluding indivi viduals, estates, or trusts) o

• wn dire

rectly or indirectly (through t h the attri ribution r rules und under the Co Code) a a “cont ntrolling int nterest” ( (at l least 80%) of each g group up and nd h have “effective c con

• ntrol
• l” (mor
• re t

than 50%)

• Combin

ined g grou

• up (com
• mbin

inat ation ion of t two a

• above)
• Affil

ilia iated s servic ice gro roups

– Generally e entities con

• nnected by

y management or

• r other s

services

Schneider Downs ACA Forms 1094 & 1095 Webinar

Employer Shared Responsibility - Penalties

• Sect

ction 4980H 4980H(a (a) – Payment nt/Penal nalty – Empl ployer ers t that don

• n’t of
• ffer insurance co

coverage t to

• 95%

95% (70% f (70% for

• r 20

2015) 5) of

• f

full ll-ti time e me emp mployees ees ( (FTEs Es) w will be s subject t to

• a penalty of
• f $2,

$2,00 000 t 0 times the he employer’s r’s to total number o

• f F

FTEs i if an em empl ployee r rec ecei eives a a pr premi emium t tax credi dit. (N (Note: F For

• r 20

2015, 5, exclude t the f first 80 80 FTEs. In 20 2016, 6, exclude t the f first 30 30 FTEs.) s.)

• Sect

ction 4980H 4980H(b) – Payment nt/Penal nalty – Coverage o

• ffered, but c

coverag age d doesn’t provid ide “min inim imum v val alue” o

• r is

isn’t “a “affordable”. P Pen enalty o

• f $

$3,000 per per em empl ployee r rec ecei eiving pr premi emium tax cred edit. – Afford rdable le – Empl ployee pr prem emium m for l lowes est-cost o

• f se

self lf-on

• nly c

coverage cannot e exceed 9. 9.56% 56% of

• f the employee’s h

hou

• useho

hold i incom

• me f

for

• r the year

(usi sing any sa safe-harbor

• r m

method

• d).

). – Min inim imum v value – must c cover at lea east 6 60% o

• f h

hea ealthcare c costs e expec pected und nder p plan an

Schneider Downs ACA Forms 1094 & 1095 Webinar

Large Employer Reporting Requirement

• Begi

ginn nning ng in in 2016, f 6, for 2015 r 5 reporting p period, , large emplo loyers (and s d small s ll self lf-ins nsure ured e employers) a ) are requir ired to f file le form rms that wi will b be e used b by t y the he I IRS RS t to det eter ermine i e if pen enalt lties u under der t the e e emplo loyer s shared d resp spon

• nsib

sibil ility ity p provisio ision a apply a and i if employees s can recei eive p prem emium t tax c x credi edits.

• Inclu

ludes es l large e emplo ployer ers w with 5 50 to 99 emplo ployees es even thou

• ugh t

the e employer shar ared r respon sponsib sibil ility ity provision ision d doe

• es

s not a t apply for 2 2015!

Schneider Downs ACA Forms 1094 & 1095 Webinar

ACA Reporting - Decision Tree

50 FTEs on

• avg. for 2015

Self-Insured YES YES File Form 1095-C & Complete Part III NO File Form 1095-C, Part III N/A Member of ALE Group NO YES At least 1 Full- Time E’ee in Any Month of 2015 NO Self-Insured Self-Insured File Form 1095-C & Complete Part III

* 1095-B eligible for some

non-employees

YES NO YES YES File Form 1095-B for E’ees with minimum essential coverage NO NO No Reporting Requirement File Form 1095-C, Part III N/A

Schneider Downs ACA Forms 1094 & 1095 Webinar

ACA Reporting – When & How

• To Employees a

s and C Covered Indiv ivid idual als

– March 31 31st

st or next

xt b busin iness d s day – Form

• rms m

may b y be fu furn rnished e ele lectronically, b but c con

• nsent fr

from

• m

re recipient f for

• r ele

lectron

• nic re

receipt require red

• To

To I IRS

– Ma May 3 y 31st

st or n

next b busin siness da day if if pape paper fil iled – June 30 e 30th

th or next b

busin siness da day if if e-file led – E-filing man mandatory if if fil iling 2 250 or mo more F Forms 1 1095-B o B or 1095 095-C ( (250 r rule appl applies t to e eac ach form se sepa parately)

Schneider Downs ACA Forms 1094 & 1095 Webinar

ACA Reporting – Required Information

• Fu

Full-time e employee’s n nam ame, ad address, an and SSN SSN

• Emplo

loyer’s name, a addr ddress, a and F d FEIN

• Whether em

employee, ee, and em employee’ e’s s spouse se a and d dep epen enden ents w wer ere e

• ffered mi

minimu mum c m coverage e each mo ch month a h and w whethe her c coverage w was affordable

• Amount

unt of f employee’s ’s p porti tion o n of l lowest cost st m monthly ly pr premi mium m available f e for sin ingle c e coverage

• Employee’s

’s e employment nt s status us b by month (includ uding ng Non-Limited Asses sessmen ent Per erio iod)

• The

e affordabil ility sa safe h harbor applic icable f e for the e em employee ee

• Whether t

the em e employee w e was en s enrolled in in the e plan

• If hea

ealth p plan is is sel self-insured, the name me and S SSN ( (or D DOB OB) o

• f e

f each ch em employee a ee and f famil ily mem ember er c covered ed

Schneider Downs ACA Forms 1094 & 1095 Webinar

ACA Reporting - Forms

• 1095-C, E

Emplo ployer-Provid ided Heal alth th I Insu suran ance O Offer and Covera rage ge

– Filed by Applicable Large Employer (ALE), including self insured ALEs – Provided to IRS and full-time employees of the employer (for any employee qualifying as full-time for any month of calendar year) – Provides information for determining whether employer owes payment under section 4980H and eligibility of employees for premium tax credit

• 1094-C, T

Transmittal o l of E Emplo loyer er-Provid ided H Heal alth th Insur uranc nce O Offer a r and C Covera rage ge I Inform rmation R n Returns urns (si (similar t to W W-3 or 1 1096)

– Filed with IRS only – Provides ALE summary information

Schneider Downs ACA Forms 1094 & 1095 Webinar

ACA Reporting – Form 1095-C

• Part I

t I

– General informat ation a about e employee and A ALE

• Part I

t II

– Ind Indicate p plan an s star art mo month ( (optional f for 20 2015) – Lin ine 1 14 - Ind Indicate typ ype of co coverage o

• ffered b

by mo y mont nth ( (Codes 1A 1A – 1I, I, See handout) – Lin ine 1 15 – Where co codes 1B 1B, 1C 1C, 1D , 1D o

• r 1E ar

1E are e ent ntered o

• n L

n Line ne 1 14, 4, provide a amount o

• f employee’s

’s l lowest cost m monthly p y premium – Lin ine 1 16 – Code

• des in

indic dicate elig igib ibil ilit ity t to a

• avoid
• id penaltie

ies u unde der 4 4980H (See handout)

• Part III

III

– Comple pleted ed o

• nly i

if f em emplo ployer o

• ffer

ers em s emplo ployer-sponsored s self-insu sured health c coverage age – Co Covered i individual al informat ation a and i indication of months of coverage age

Schneider Downs ACA Forms 1094 & 1095 Webinar

Form 1095-C, Part II, Line 14 Codes

• Co

Code de 1A 1A - Quali lify fying O Offer: r:

– Minimum m essential coverage pr providing mi minimum valu lue o

• ffered t

to ful ull-time me e empl ployee with empl ployee co cont ntribution for self-onl

• nly coverag

age equal al t to o

• r l

less than n 9. 9.56% 56% ($93. 93.77 7 pe per mon month for

• r 2015)

mai mainland s single f federal al po poverty line ( (FPL); and nd – At At leas ast mi minimum e essential c coverage of

• ffered to
• spo

pouse an and d depe pendent(s). ). – For 20 2015, 5, t the mainland single F FPL PL is $1 $11,770 70.

15

Schneider Downs ACA Forms 1094 & 1095 Webinar

Form 1095-C, Part II, Line 14 Codes

• Cod
• de 1

1B

– Minimum e esse sential c coverage provi viding m minimum va value o

• ffere

red to empl ployee only.

• Cod
• de 1C

– Minimum e esse sential c coverage provi viding m minimum va value o

• ffere

red to empl ployee; an and – At least st minimum esse sential covera rage o

• ffere

red t to d dependent(s) s) ( (not s spou

• use

se).

• Co

Code 1 1D D

– Minimum e esse sential c coverage provi viding m minimum va value o

• ffere

red to empl ployee; an and – At least st m minimum e esse sential c covera rage offere red to spou

• use

se ( (not

• t d

dependent(s)).

• Cod
• de 1E

E

– Minimum e esse sential c coverage provi viding m minimum va value o

• ffere

red to empl ployee; an and – At l least st minimum esse sential covera rage o

• ffere

red t to d dependent(s) s) a and spouse se.

16

Schneider Downs ACA Forms 1094 & 1095 Webinar

Form 1095-C, Part II, Line 14 Codes

• Co

Code de 1F 1F

– Minimum e essential c l coverage ge NOT pr providi ding minimum v value offered t d to:

• Em

Emplo loyee; ; or

• r
• Employee and

ee and spous use o

• r d

dep epend endent ent(s (s); ); or

• r
• Employee, s

ee, spous use e and and dep epend endent ents.

17

Schneider Downs ACA Forms 1094 & 1095 Webinar

Form 1095-C, Part II, Line 14 Codes

• Co

Code de 1G 1G

– Offer er of c cover erag age t e to em

• employee

ee who:

• Was

as no not a a ful ull-tim ime e e employee f ee for an any mont nth o

• f

the cal alend endar ar y year ear; ; and and

• Enrolle

lled i d in sel elf-ins insured ed c cover erage age for o

• ne

ne or more m e mont nths o

• f t

the c e cal alend endar ar y year ear.

• Ent

nter er code 1 e 1G in in the ' e 'ALL' L' b box and and do no not complete t e the m e mont nthly b boxes.

18

Schneider Downs ACA Forms 1094 & 1095 Webinar

Form 1095-C, Part II, Line 14 Codes

• Co

Code de 1H 1H

– No o

• ffer

er of c cover erage age (em (employee ee no not o

• ffer

ered ed an any heal ealth c cover erage o age or em employee o ee offer ered ed c cover erag age e that at is is no not m minim inimum es essent ential ial c coverag age). e).

19

Schneider Downs ACA Forms 1094 & 1095 Webinar

Form 1095-C, Part II, Line 14 Codes

• Co

Code de 1I 1I

– Qual ualif ifying ing O Offer er T Trans ansit itio ion n Rel elief ief 2015— Employee (and ee (and spous use o e or d dep epend endent ents) r ) rec eceiv eived ed:

• No of

No offer of

• f c

coverage;

• An

n offer er t that at is is no not a a qual ualif ifying ing offer er; ; or

• r
• A qual

ualif ifying ing o

• ffer

er f for l les ess than an 12 mo months.

20

Schneider Downs ACA Forms 1094 & 1095 Webinar

Form 1095-C, Part II, Line 16 Codes

• Co

Code de 2A 2A

– Employee no ee not em employed ed dur uring ing the m e mont nth. .

• Use

se this is code if if the employee was as not employed on an any y day o y of the month.

• Do n

not u use t this code if the in individual al is is an an employee of the ALE

• n an

any d day o y of t the m month.

• Do n

not u use t this code for an any m month in in which an an employee termi minates es emp mployment with t the e AL ALE. E.

21

Schneider Downs ACA Forms 1094 & 1095 Webinar

Form 1095-C, Part II, Line 16 Codes

• Co

Code de 2B 2B

– Employee no ee not a a ful ull-time e e employee ee. – Use se this s cod

• de i

if the em employee: ee:

• Is

s not a a f full ll-time em employee f ee for the e mont nth; and

• Did no

not enr nroll i in m n minimum es essent ential co coverage, e, i if o

• ffer

ered ed, for

• r t

the m mont nth.

22

Schneider Downs ACA Forms 1094 & 1095 Webinar

Form 1095-C, Part II, Line 16 Codes

• Co

Code de 2C 2C

– Employee enr ee enrolled in in cover erag age e offer ered.

• Use this code for an

any y month in in which t the e employee e enrolled in in health c cover erage ge offer ered b ed by the e ALE, r regardl dles ess of whether er a any

• ther code in

in this is code series might al also ap apply.

Note te: If : If the employee e enrol

• lled i

in employer-spon

• nsored c

coverage, , the IR IRS will n not need any y further i information

• n to
• determine an employer’s com
• mpliance w

with t the emp mployer shared ed r responsibility r y rules es or an emp mployee’s ’s e eligi gibility f y for a subsidy. . Employees w who

• are enrol
• lled in e

employer-spon

• nsor
• red coverage a

are n not e eligible for

• r a

a subsidy (regardless of

• f whether t

the coverage is a affor

• rdable or
• r provides mi

minimu mum value ue), a and nd therefore c canno nnot t trigger an n empl ployer shared r responsibility pe pena nalty f for the e emp mployer er. .

23

Schneider Downs ACA Forms 1094 & 1095 Webinar

Form 1095-C, Part II, Line 16 Codes

• Co

Code de 2D 2D

– Employee ee in in a a Sec ectio ion 4 n 4980H(b (b) Lim ) Limit ited ed Non- Asses essment ent P Per erio iod.

• Use this code for an

any y month d during which an an employee is in in a a Limi mited d Non-Asse ssessm ssment P t Period.

• A

A Limi mited ed Non-Assessment Per eriod is a per eriod du during which an ALE w will n not be s subject to a a Section 4980H H penal alty f for a a full-tim ime employee, r regar ardless of whether that e emplo loyee is offered heal alth coverage du during g that p per eriod.

24

Schneider Downs ACA Forms 1094 & 1095 Webinar

Form 1095-C, Part II, Line 16 Codes

• Co

Code de 2E 2E

– Multiemplo ployer i interim rule r relief.

• Use t

this code for an any m y month for which t the mult ltiemployer in interim guidance ap applies for that at employee.

• This

s multiemplo loyer interim guidance provides t that at an an ALE is treated ed a as offer ering g health cover erage ge to an employee ee if the e ALE is required d by a collec ective e barga gaining agreeme eement to make e contrib ibutions f for that at employee to a a multiemplo loyer plan an that at

• ffer

ers afforda dable, e, minimu mum m value s self-only coverag age, an and als also

• ffer

ers health cover erage ge to the e employee ee’s d depen ende dents.

• This c

code de should b d be u used i ed if applicable e instea ead d of t the e affordability safe harbors (2 (2F, 2G, G, o

• r 2

2H) ) if applicable.

25

Schneider Downs ACA Forms 1094 & 1095 Webinar

Form 1095-C, Part II, Line 16 Codes

• Co

Code de 2F 2F

– Section 4980H 980H A Afforda dability F Form W W-2 S Saf afe e Harbor.

• Use this c

code de if the e ALE used ed the e Form m W-2 s safe e harbor t to det eter ermine afforda dability f for this e employee e for the e yea ear.

• The

e Fo Form W-2 s safe e harbor m measures es afforda dability o

• f emp

mployer- sponsored ed cover erage ge b based ed on an employee ee’s Form m W-2 w wages ges (r (rep eported in Box 1 1) ) from that AL ALE. E.

• If an

an employer uses t this is saf afe h har arbor for an an emplo loyee, it must be used for al all l months o

• f the cale

alendar year ar for whic ich t the e employee is offer ered h ed health cover erage. ge.

26

Schneider Downs ACA Forms 1094 & 1095 Webinar

Form 1095-C, Part II, Line 16 Codes

• Co

Code de 2G 2G

– Section 4 4980H 980H Afforda dability Fede deral P Poverty L Line Saf afe H e Har arbor.

• Use this code

de if the e ALE used ed the e fede deral pover erty line safe e harbor to det eter ermine a afforda dability for a any month(s (s). ).

• The

e federal al poverty lin line saf afe har arbor meas asures af affordab ability o

• f

employer-sponsored ed cover erage ge based ed o

• n the

e feder deral p pover erty l line e for a a sin ingle in individual al in in effect wit ithin s six months before the first day y of t the p plan an year.

27

Schneider Downs ACA Forms 1094 & 1095 Webinar

Form 1095-C, Part II, Line 16 Codes

• Co

Code de 2H 2H

– Section 4 4980H 980H Afforda dability Rate o

• f P

Pay S Safe Harbor.

• Use this c

code de if the e emp mployer er used t d the e rate e of pay safe e harbor t to det eter ermine afforda dability f for this e employee e for any m month(s (s). ).

• The

e rate o e of p pay safe h e harbor measures es afforda dability of emp mployer er- sponsored ed cover erage ge b based ed on an employee ee's r rate of pay.

28

Schneider Downs ACA Forms 1094 & 1095 Webinar

Form 1095-C, Part II, Line 16 Codes

• Co

Code de 2I 2I

– Non Non-cal alend endar ar year ear t trans ansit itio ion r n rel elief ief ap applies ies to t this is em employee ee.

• Use t

e this code if Sec Section 4980H(b) non-cal alendar y year ar t tran ansition relief ap applie ies to this is emplo loyee for the m month.

• If certain

ain c condit itions a are met, a an ALE t that has a a non-cal alendar year plan an may b y be t treat ated as as offerin ing min inimum e essential al cover erage ge that i is afforda dable e and p provides des m minimu mum m value e for t the e months p prior to the 2 2015 plan lan year ar.

29

Schneider Downs ACA Forms 1094 & 1095 Webinar

Examples – Form 1095-C, Lines 14-16

30

• Ongoi
• ing f

full ll-time em e employee ee

– Emp mployee, e, family enrolled ed in minimu mum m value c e cover erage ge – Sel Self-only, minimu mum v m value c cover erage i ge is $110/m 0/mon

• nth

– Information is the sam ame for eac ach month o

• f the cale

alendar ar y year ar

Schneider Downs ACA Forms 1094 & 1095 Webinar

Examples – Form 1095-C, Lines 14-16

• Ongoi
• ing f

full ll-tim ime em employee ( ee (sel elf-ins nsur ured p plan) n)

– Empl ployee and

and s spous use e enr nrolled in n mi mini nimum val alue ue s self-insured ed pla plan a all ll year; child a added i in Ju July – Self elf-only, m minimum v value coverage age i is $110/ 0/month

31

Schneider Downs ACA Forms 1094 & 1095 Webinar

Examples – Form 1095-C, Lines 14-16

• On

Ongo going f full-time e emplo loyee

– Cover erage ge offer ered t d to e emp mployee, e, spouse, and depen ende dents – Emp mployee e waived ed cover erage ge at open enrollm lment – Sel Self-only, minimu mum v m value c cover erage ge is $110/month

• Emp

mployer set et emp mployee ee contributions u using g W-2 s saf afe h e har arbor

32

Schneider Downs ACA Forms 1094 & 1095 Webinar

Examples – Form 1095-C, Lines 14-16

• On

Ongo going f full-time e emplo loyee

– Cover erage ge offer ered t d to e emp mployee, e, spouse, and depen ende dents – Emp mployee e waived ed cover erage ge at open enrollmen ment – Sel Self-only, minimu mum v m value c cover erage i ge is $500/mo month and nd no no afforda dable s e safe e harbor i is met et

33

Schneider Downs ACA Forms 1094 & 1095 Webinar

Examples – Form 1095-C, Lines 14-16

• Newly hir

y hired fu full-time em e employee ee

– Emp mployee e hired ed March 1 15th – Waiting g per eriod: em employees el eligi gible on 1st of mo month after 60 da days o

• f em

employment – “Qualifying g Offer er” ” made de on J June e 1st

Not offered coverage Offered coverage Not yet an employee Waiting period Enrolled in coverage

Schneider Downs ACA Forms 1094 & 1095 Webinar

Variable Hour Employees

• Variable

le Hour E Emplo loyee ees

– Emplo loyees w whos

• se h

hou

• urs f

flu luctuate – Em Employer er no not s sur ure e if em employee e is f ful ull-time ime o

• r not
• Two Ways t

to M Measure ure

– Mo Mont nthly Mea Measur urem emen ent ( (Act ctual Mont Monthly H Hour urs) – Look

• k-Back

ck Mea Measur urem ement

• Based o
• n measure

rement period

• d b

between 3-12 co cons nsecutive mo mont nths

• Fu

Full-time v

• vs. part-time s

stat atus no not d determined unt until end nd o

• f

measurement p perio riod

• Employee’s s

status stays t the s same f for

• r fol
• llowing stabil

ility p perio riod d (greater o

• f 6 months o
• r length o
• f measurement p

period)

• Look-Back method m

d must be used c d con

• nsis

istently f for

• r all employees or
• r

employee c classes

35

Schneider Downs ACA Forms 1094 & 1095 Webinar

Examples – Form 1095-C, Lines 14-16

• Ne

Newly h hired ed v variabl ble e hour ur em employee ( ee (Look-Back M k Method) d)

– Emp mployee e hired ed April 1 1st wit ith var ariab able s schedule – Employee works 1 120 hours p per er mo month from April t through Septemb mber er 2 2015 – Employee works 1 140 hours per er mo month from October 2 2015 through Mar March 2016 – Init itial al m meas asurement period April il 1, 2 2015 through Mar March 31, 2016 u under er the Look-Back Met ethod – No F

• For
• rm 1095

095-C for 2 2015 – not (yet) a a full ll-tim ime emplo loyee u until en end of the mea e measurement p per eriod

Schneider Downs ACA Forms 1094 & 1095 Webinar

Examples – Form 1095-C, Lines 14-16

• Ne

Newly h hired ed v variabl ble e hour ur em employee ( ee (co cont nt’d)

– Emp mployee e averages ges over 30 hours/wee eek – No wait aiting period; employee is is elig igible f first of m month f followin ing end of in initial l meas asurement period – Form 1095-C f for 2016:

Not offered coverage Offered coverage Enrolled in coverage

Schneider Downs ACA Forms 1094 & 1095 Webinar

Examples – Form 1095-C, Lines 14-16

• Newly h

hired ed v varia iable h e hour ur e employee ee (Mont nthly M Measur urem ement ent)

– Empl ployee h hire red Apri ril 1st w with va vari riable s schedule – Empl ployee work rks s 120 hours p s per m r month f from

• m A

Apri ril t throu

• ugh Sept

ptember 2 r 2015 – Empl ployee w work rks 1 s 140 hours p s per m month f from Octob

• ber 2

r 2015 through M gh March h 2016 – No m measu sure rement peri riod

• d u

under r monthly m method

• d

– No w wait itin ing pe period t to

• begin c

coverage pe per e r employer’s pl plan – In t this s exampl ple, t the e empl ployer m r must st offer r coverage b by O Octob

• ber

r 1st

st 2015 o

• r

po potentially b be su subject t to pe

• penalties.

38

Schneider Downs ACA Forms 1094 & 1095 Webinar

Examples – Form 1095-C, Lines 14-16

• Termina

inated ed e employee ( ee (enrolled ed i in coverage) e)

– Emp mployee e enrolled ed in cover erage a ge at open en e enrollme ment January 1st – Sel Self-only, minimu mum v m value c cover erage i ge is $110/month – Em Emplo loyment nt termina nated o

• n Aug

ugust ust 15th; – Pl Plan an offers coverag age t through the end of the month in in which the employee terminat ated

Schneider Downs ACA Forms 1094 & 1095 Webinar

Examples – Form 1095-C, Lines 14-16

• Termina

inated ed e employee ( ee (enrolled ed i in coverage) e)

– Emp mployee e enrolled ed in cover erage a ge at open en e enrollme ment January 1st – Sel Self-only, minimu mum v m value c cover erage i ge is $110/month – Em Emplo loyment nt termina nated o

• n Aug

ugust ust 15th; – Plan o

• ffer

ers cover erage ge through gh the date e of t termi mination

Schneider Downs ACA Forms 1094 & 1095 Webinar

Examples – Form 1095-C, Lines 14-16

• Termina

inated ed e employee ee

– Emp mployee e waived ed cover erage ge at open enrollmen ment – Sel Self-only, minimu mum v m value c cover erage i ge is $110/month

• Emp

mployer set et emp mployee ee contributions u using g W-2 s saf afe h e har arbor

– Em Emplo loyment nt termina nated o

• n Aug

ugust ust 15th – Pl Plan an offers coverag age t through the end of the month in in which the employee terminat ated

Offered coverage Not offered coverage Offer satisfies safe harbor

Employed part of Aug.; then not an employee

Schneider Downs ACA Forms 1094 & 1095 Webinar

Examples – Form 1095-C, Lines 14-16

• Full

ll-time em employee r ee red educ uced ed t to part t time ( e (COBRA a accep ccepted ed)

– Empl ployee ee, f family y enr nrolled in n mini nimum v value c coverage – Self lf-only, m minimu mum m value cover erage i e is $ $110/month th – Empl ployee ee i is red educed t to pa part-ti time me on August 1 t 1st; plan o

• ffers c

coverage thr hrou

• ugh d

date of

• f eligibili

lity – Em Employer us uses mont nthly m y measur urement a and nd part-time e emplo loyees n not eligible le for c coverage und under th the p plan n as of th the d date th they a are no no long nger f ful ull-ti time me – CO COBRA o

• ffered a

d and d accepted for

• r f

family; $300/ $300/month f for

• r s

single co coverage

42

Schneider Downs ACA Forms 1094 & 1095 Webinar

Examples – Form 1095-C, Lines 14-16

• Full

ll-time em employee r ee red educ uced ed t to part t time ( e (COBRA d decl eclined ed)

– Empl ployee ee, f family y enr nrolled in n mini nimum v value c coverage – Self lf-only, m minimu mum m value cover erage i e is $ $110/month th – Empl ployee ee i is red educed t to pa part-ti time me on August 1 t 1st; plan o

• ffers c

coverage thr hrou

• ugh d

date of

• f eligibili

lity – Em Employer us uses mont nthly m y measur urement a and nd part-time e emplo loyees n not eligible le for c coverage und under th the p plan n as of th the d date th they a are no no long nger f ful ull-ti time me – CO COBRA o

• ffered a

d and d dec eclined ed fo for family; $300/ $300/month for

• r single co

coverage

43

Schneider Downs ACA Forms 1094 & 1095 Webinar

Examples – Form 1095-C, Lines 14-16

• Ter

erminating em employee ee el elect ects COBRA co cover erage

– Emp mployee, e, family enrolled ed in minimu mum m value c e cover erage ge – Sel Self-only, minimu mum v m value c cover erage i ge is $110/month – Employment terminat ated o

• n July

y 15th, plan o

• ffer

ers cover erage ge through gh date o e of termi mination – COBRA o

• ffer

ered a d and accep epted d for f family; $ $300/mo month for singl gle e cover erage ge

Schneider Downs ACA Forms 1094 & 1095 Webinar

Examples – Form 1095-C, Lines 14-16

• Ter

erminating em employee ee decl eclines es C COBRA RA co cover erage e

– Emp mployee, e, family enrolled ed in minimu mum m value c e cover erage ge – Sel Self-only, minimu mum v m value c cover erage i ge is $110/month – Employment terminat ated o

• n July

y 15th, plan o

• ffer

ers cover erage ge through gh date o e of termi mination – COBRA o

• ffer

ered a d and dec declined for f fami mily; $300/mo month for s singl gle e cover erage ge

Schneider Downs ACA Forms 1094 & 1095 Webinar

ACA Reporting – Form 1094-C

• Pa

Part I I

– Ge Gene neral inf nformation about ut ALE LE – Total num number o

• f F

Forms 1095-C s submitted w with t h transmittal

• Pa

Part I II

– ALE LE Grou

• up Member infor
• rmation

– Certif ificatio ions of Elig igib ibil ilit ity

• In

Indicate whether the e employer m meets the e eligibility r requireme ments a and i is u using

• ne

ne of t the O Offer M Methods and nd/or one ne of t the f forms of Transition R Relief

• Pa

Part III

– In Indicate w whether M Minimum Essential C Coverage of

• ffer w

was made to

• 95% of
• f full-tim

ime employees b by y mon month – Fu Full-time e employee c cou

• unt by

y mon month – Total e empl ployee c coun unt b by mont nth – In Indicate w whether A ALE LE was a an ALE LE Grou

• up M

Member by y mon month – In Indicate typ ype of

• f Section 4

4980H Transition R Relief i if a applicable (Cod

• de A

A when less t than 100 fu 00 full-time employees, C Cod

• de B

B when 1 100 or

• r mor

more f full-time e e emp mployees es)

• Part IV (Aggr

gregat gate ALE G Group M Members O Only) y)

– Provide n name and FEIN IN of

• f other ALE

LE Grou

• up Members

Schneider Downs ACA Forms 1094 & 1095 Webinar

ACA Reporting – Form 1094-C

• Par

art II, II, Line ine 22

– Quali lifyi ying O Offer M r Metho hod – Box A A

• Employer elig

ligible for method w when it it provides a a Qu Qual alifying Of Offer (Code 1A) to an an employee f for al all months in in whic ich the employee is s full ull-tim ime

• For an

any ap applicable f full-time employees, the e employer fills out

• nly Line 1

e 14 i in Part II o

• f Form

m 1095-C for any month wher ere e Line e 14 is Code 1 de 1A

• Fully insured employers m

may y provide a a general al stat atement ab about the e employee ee’s healthcare e to any emp mployee ee r recei eiving g a Qu Qual alifying Of Offer for al all l 12 m months instead of Form 1095-C

47

Schneider Downs ACA Forms 1094 & 1095 Webinar

ACA Reporting – Form 1094-C

• Part II, L

Line 22 22

– Qua ualifying O Offer er Me Method T Trans nsition Rel elief ef – Bo Box B x B

• Employer e

r elig igib ible for

• r method w

d when it it provide ides a Qualif ifying Offer r (C (Code 1 e 1A) ) to 95% 95% o

• f its ful

ull-time e employees f for any m y month i in t the calend ndar ye year

• For a

any m month w whi hich t thi his a s appli pplies es, t the em he emplo ployer f fills lls out o

• nly

ly Li Line 1 e 14 in n Par art II II for all F Forms 1 1095-C it it fil iles and on d only uses code

• des:

– 1A if if the e employee re receiv ived a a q qualif ifying of

• ffer f

r for

• r the m

mon

• nth

(should a apply t to approximately 95% o

• r more of the Forms

10 1095-C for given m month) – 1I if if the e employee did did not re receive a a qualifying of

• ffer f

r for

• r the

month ( (should apply t to a approximately 5 5% o

• r less of Forms

10 1095-C for given m month)

• Ful

ully ins nsur ured e employers ma may provide a a ge gene neral stat atement ab about t the employee’s ’s h healthcare t to a any y employee receiving a g a Qual alifyi ying O g Offer for al all 12 mo 12 mont nths i ins nstead o

• f Form

m 10 1095-C

48

Schneider Downs ACA Forms 1094 & 1095 Webinar

ACA Reporting – Form 1094-C

• Part II, Li

II, Line 2 22

– Section 4980H Transition Relie ief – Box

• x C
• 50-99 F

FTE R TE Relief – No No S Section 498 980H 0H p penalty will a appl ply f for a r any c calendar r month d duri ring 201 015. – Eligi gibili lity ty b based o

• n the f

foll llowing c g conditi tions:

• Th

The empl ployer i r is a an ALE o

• r is p

part of an Aggre regated A ALE G Group p that had 5 50 0 to 99 99 full-ti time empl ployees i s in 2014

• Du

During the pe peri riod of

• f February 9

y 9, 2014, t through De December 3 31, 2014, the the A ALE or the the A Agg ggregated ALE G Group did not

• t r

reduce its s work rkfor

• rce o
• r reduce t

the hours s of service o

• f its

s empl ployees i s in order r to to qualif ify

• Du

During the pe peri riod of

• f February 9

y 9, 2014, t through De December 3 31, 2015 (for

• r calendar y

r year r end p plans) t the ALE o E or A Aggre regated A ALE Group p does s not

• t e

eliminate o

• r m

materi rially r reduce t the h health coverage, i if a any, it o

• ffere

red a as of Febru ruary 9 9, 2014.

49

Schneider Downs ACA Forms 1094 & 1095 Webinar

ACA Reporting – Form 1094-C

• Par

art II, II, Line ine 22

– Sectio ion 4 4980H T Transi sitio ion R Relie ief – Box C C

• 100 o
• r m

more e FTE E Re Relief – IRS r S red educes the e em employer’s full-time me emp mployee ee count by 80 full ull-tim ime employees in calculating p penal altie ies under section 4980H(a (a), ), when en e employer er does es n not offer er any health cover erage ge to an emp mployee e the e emp mployer er i is required ed to offer er cover erage ge to

50

Schneider Downs ACA Forms 1094 & 1095 Webinar

ACA Reporting – Form 1094-C

• Part II, Li

II, Line 2 22

– 98% 98% O Offer M Method – Bo Box D x D

• Em

Employer mus must o

• ffer of
• f min

inim imum essential c coverage p provid iding minimum value t that is affordab able t to 98% o

• f

f fu full ll-time e employees

• If the employer is

is con

• nfide

dent it it has provide ided c d coverage t to

• 98% of
• f

thos

• se employees it

it is is supposed d to

• of
• ffer c

r coverage t to,

• , t

then it it doe does not have t to actually y go through gh t the process o

• f determining w

g whether tho hose se em emplo ployees a s are fu full ll-time o

• r not
• The e

employer stil ill h has to f

• fil

ile Form

• rm 1

1095-C f for all fu ll full ll-time e employees how

• weve

ver

• If employer s

selects t this is m method, it it doe does n not have t to c

• com
• mplete t

the “Fu Full-Time E Employee Co Count” i in P Part III, I, column ( (b) of Form 1 1094-C

51

Schneider Downs ACA Forms 1094 & 1095 Webinar

ACA Reporting - Forms

• 1095

095-B, B, H Health C th Coverage

– Fil Filed b by y the he in insu surance issu issuers a and n non-ALE s E sel elf ins nsured ed em employer ers – Pr Provided ed to IRS RS a and nd co cover ered ed i ind ndividuals w who recei eceived ed minimu imum e m essential c coverage – Provid ides i s informa matio ion f for individuals r s regardin ing indiv ivid idual shared r res espons nsibility o

• n

n Form 1 1040 040

• 10

1094-B, B, T Transmitt ittal al of Health C th Coverage Information R Ret eturn rns ( s (similar t r to W-3 o 3 or 1096 096)

– File led w with I IRS S on

• nly

ly – Ins nsurer i inf nformation a and nd num number ber of Forms 1 1095 095-B subm ubmitted

Schneider Downs ACA Forms 1094 & 1095 Webinar

ACA Reporting - Forms

• Form 1095

095-B

– Part I t I – Respo ponsib sible I Individu idual al

• Informat

ation r regardin ing the recipien ent/prima mary name me on cover erage ge

– Part t I, Li I, Line 8 8 - Enter t the he le letter i identify fying t the he ori

• rigin of
• f the

he po policy.

• A. Smal

all B Business He Heal alth Op Optio ions Pr Program (SHO HOP) P).

• B. Emp

mployer er-sponsored d cover erage. ge.

• C. Gover

ernmen ent-sponsored ed program. m.

• D. Individ

idual al market insuran ance.

• E. Mu

Multie iemployer plan an.

• F. Other

er design gnated ed minimu mum e m essen ential cover erage ge.

– Part t I, Li I, Line 9 9 – Le Leave b bla lank f for

• r 2015

53

Schneider Downs ACA Forms 1094 & 1095 Webinar

ACA Reporting - Forms

• Form 1095

095-B

–Par art t II II

• Insurance com
• mpanies e

entering c cod

• des A

A or

• r B on
• n li

line 8 8 will ll compl plete P Part II. II.

• Employe

yers rep eporting s sel elf-in insured co cover erage ent e enter er code B B on

• n

li line 8 (i (in Par art I), I), but but sk skip ip Part II II and g d go to Part III III

• Thir

hird par arty in insu surance p providers s comple lete Lines 10- 15. . Ent Enter er the na e name, e, EI EIN, N, a and nd co complete m e mailing a addres ess for

• r t

the em employer er spons nsoring the co e cover erage.

54

Schneider Downs ACA Forms 1094 & 1095 Webinar

ACA Reporting - Forms

• Form 1095

095-B

–Par art t III III

• Lines 16

16–22. Ent Enter er y your ur na name, EI EIN, N, a and nd co complete e mai mailing ad address

• ss. T

The he provider o

• f

f the he coverage ge is is the he issu issuer

• r ca

carrier er of i ins nsured co cover erage, e, spons nsor

• r of a

a s self-in insu sured em employer er p plan, n, gover ernm nmen ent a agency ency p providing g gover ernm nment- spons nsored ed co cover erage, o

• r other

er co coverage s e spons

• nsor. Ent

Enter er o

• n

n line 1 ne 18 8 the e tel elep ephone num e numbe ber a an i n ind ndividual s seek eeking additional i l infor

• rmation
• n m

may c call t ll to

• speak t

to

• a person
• n.

55

Schneider Downs ACA Forms 1094 & 1095 Webinar

ACA Reporting - Forms

• Form

m 1095 095-B

– Par Part I IV—Cover ered ed Individu duals

• Colu

lumn ( (a). Enter t r the n name o

• f e

each covered i individual.

• Co

Column ( (b) b). Enter t r the n nine-digit S SSN SN or ot

• ther T

r TIN f for e each c covered individual ( (111 111-11 11-1111). Th The f field may b be left blank i if the c covered individual d does n s not

• t h

have a a TIN. S See St Statements F s Furnish shed t to Individuals, earlier, f for i

• r information on
• n tru

runcating t the SS SSN or

• r other TI

TIN.

• Colu

lumn ( (c). Enter a r a date o

• f birth (YYYY

YYY-MM MM-DD DD) for t r the c covere red i indivi vidual

• nly

ly if a an S SSN o

• r o
• the

her T TIN isn't 't entered i in c colu lumn ( (b).

• Column (

(d). Che heck thi this box i if the the i individual w was covered f for a at t le least o

• ne

day p per month f th for a all 1 ll 12 months ths of t the c cale lendar y year.

• Colu

lumn ( (e). If the the i individual wasn't c covered for a all ll 1 12 months, che heck the the appl plicable b box(es) s) for t r the months i s in which t the i indivi vidual was c covered for r at least st o

• ne d
• day. If t

there re a are more re t than six covere red i indivi viduals, s, compl plete t this s informati tion f for the a additi tional c covered i individuals ls o

• n P

Part t IV, C Conti tinuati tion Sheet(s) s).

56

Schneider Downs ACA Forms 1094 & 1095 Webinar

Employer Reporting - Penalties

• Sect

ection 672 6721 & 1 & 6722 6722 – Reportin ing P Penal altie ies

– Sect ection 672 6721 1 - Failure to timely f file co e correct ect r retur urns t to the e IRS. . – Sect ection 6722 6722 - Fail ilure to timel ely fur urni nish co correct ect f forms t to FT FTEs s and co cover ered ed indiv ivid iduals. s. – Rep eporting p pena enalties es a are e $250 p $250 per er retur urn, up up t to $3,000,000 maximu imum – Rel elief ef fr from m rep eporting p pena nalties es on

• n incor
• rrect a

and/or

• r

incomple lete i infor

• rmation
• n f

for

• r 2015 i

if file ler c can s show good

• od faith

effor

• rt t

to

• com
• mply

ly

Schneider Downs ACA Forms 1094 & 1095 Webinar

ACA Reporting – Action Steps For ALEs

• Read P

d Public icat atio ion 5 5196 (Brochure) t to gain u underst standin ding o

• f

require rements

• Review o

w own wnership st structure o

• f related c

compan panies an and d perform c m controlled/a d/affil iliat iated s d servic ice g group a p analysi sis

• Disc

iscuss an and d de determine dat data c a collection an and d repo porting resp sponsib sibil ilit itie ies w s with h health p plan’s t s thir ird-par party a admin minis istrat ator an and d pa payroll pr provider

• Review F

Form 1 1094-C a and 1095 095-C i C inst structions ( s (1094-B & B & 1095 095-B if if appl applicable)

Schneider Downs ACA Forms 1094 & 1095 Webinar

ACA Reporting – Action Steps For ALEs

• Set u

up process a and begin t tracking e emplo loyees’ f ’ full t l time st status b by mo month

• Tra

rack hou hours rs of

• f part-time e

emplo loyees

• Develop pr

p procedures an and d begin c collecting in information ab about

• f
• ffers

rs of

• f he

health c h coverage a and he health p pla lan e enrol

• llment b

by y mo month

• Asse

ssess af affordability o

• f the pl

plan ans

• Id

Identify fy t the he a amou

• unt of empl

ployee’s po portion o

• f lowest c

cost st mo monthly pr premium a avail ailab able f for sin single coverage b by y mon

• nth

Schneider Downs ACA Forms 1094 & 1095 Webinar

Thank You

Ple lease co cont ntact ct us us f for r additiona nal inf nformation o n or r questi stion

• ns.

s.

• Kathy P

y Petrucci

– kpetrucci@schneiderdowns.com – 614 586-7214

• Zach Da

h Davi vis

– zdavis@schneiderdowns.com – 614 586-7235

60

Schneider Downs ACA Forms 1094 & 1095 Webinar

Additio itional R Reference M Materia ial

61

Schneider Downs ACA Forms 1094 & 1095 Webinar

Calculating FTEs and FTEEs

• Det

eter ermine e the e total n numb mber of emp mployee ees each month during t g the e preced eding c g calen endar year.

– Ste tep #1 #1 – calc lcula late w who is a an FTE FTE ( (“full l time emplo loyee”) – an e n empl ployee who w works 30+ h hou

• urs p

per week – Step #2 #2 – calculate F FTEE (“full t time e emp mployee ee equ quivalent”) – Spe pecial c calcul ulation f for part t time employees who

• wor
• rk mor

more t than 120 d days ys per y year.

• Tak

ake t total h l hours o

• f par

art t time em employees p per er m month / / 120.

• Res

esult is t the n e number of F FTEEs.

– Add Step #1 a #1 and #2 t #2 to g get t total pe per mont nth

• Add

dd the total number o

• f em

employees ea each mo month toge gether a and d di divide b by 12 f for the aver erage number o

• f F

FTE TEs and F d FTE TEES p per er mo month

• If the em

employer a aver erages 50 or mo more em employees then t the em employer has a a filin ing requirement

*Be s sur ure t to look at ent ntities und under c common o n owne nership for lar arge em ge employer gr groups

62

Schneider Downs ACA Forms 1094 & 1095 Webinar

Calculating FTEs and FTEEs

(A) Full Time Employees

= Avg. 30+ hrs./week

• r 130+

hrs./month

(B) Part Time Employees

Total combined monthly hrs./120

(A) + (B)

= Full Time Equivalent Employees (FTEEs)

Schneider Downs ACA Forms 1094 & 1095 Webinar

Calculating FTEs and FTEEs

• Application to New Employers

– An employer that was not in existence on any business day in the prior calendar year is an ALE for the current calendar year if it reasonably expects to employ, and actually does employ, an average of at least 50 full-time employees (including full- time equivalent employees) on business days during the current calendar year

• 2015 Transition Rule for Determining Workforce Size

– A transition rule for 2015 allows an employer to use any consecutive six-month period during 2014 to measure its workforce size, rather than using the full 12 months of 2014.

Schneider Downs ACA Forms 1094 & 1095 Webinar

Large Employer Status

• Co

Common O Owne nership a and nd Co Controlled Gr Groups

– In determ rmining w whethe her a r a company i y is subject t to the he Emplo loyer S Share red R Responsibility r y require rement, , two wo o

• r

mo more c compan panies t that h have commo mmon o

• wnership

p may ay b be treated a as a single le e emplo loyer – Al All em employee ees o

• f such

ch co companies m must b be e co counted in t the he determination

• n o
• f larg

rge e emplo loyer u r under r ACA i if f the he compa panies f form a a “controlled g group” p”

Schneider Downs ACA Forms 1094 & 1095 Webinar

Controlled Groups

Why hy Do Co Controlled G d Groups M Mat atter?

• Yo

You might ht b be a larg rge e emplo loyer r whe hen you thin ink y you’re sma small

– Example: You have common ownership of dealership A with 30 employees and dealership B with 30 employees. Dealership A and dealership B are a controlled group and both are considered a large employer.

• Yo

You own wn an another c compa pany y you think is “ is “sma small,” b but sh should d be consi side dered a a lar arge e empl ployer u unde der A ACA CA

– Example: You have common ownership of dealership A with 80 employees and restaurant B with 5 employees. Dealership A and restaurant B are a controlled group and both are considered a large employer.

Schneider Downs ACA Forms 1094 & 1095 Webinar

Controlled Groups

There a are four pr primary t type pes of c controlle lled d gr groups ps:

• Par

arent ent-subsidi diary controlle led g d group

– One c corpora rporation

• n o
• wns d

s dire rectly at least st 8 80% of the v vot

• ting p

power o r or va value of anot

• ther c

r corpora rporation

• n

– All l ot

• ther c

r corpora rporation

• ns of which 8

80% of vot

• ting p

power o r or va value o

• f stoc
• ck owned b

by anot

• ther

r member i r is i s included i in the g group

• Brothe

ther-sister c controlle lled g d group

– A group up o

• f two or more compa

panies w where f five o

• r fewer common owne

ners (inc ncluding indivi viduals, estates, or trusts) o

• wn dire

rectly or indirectly (through t h the attri ribution r rules und under t the Co Code) a “cont ntrolling i int nterest” (at least 8 80%) o

• f eac

each gr group an and h have e “effective c con

• ntrol
• l” (m

(more re th than 50% 50%)

• Combined

ined gr group up (c (combinat inatio ion o n of two ab above) e)

• Affili

liated d service ce g groups ps

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Schneider Downs ACA Forms 1094 & 1095 Webinar

Controlled Groups

Parent nt-Su Subsidiar sidiary c controlled g d group e p exam ampl ple

Corporat atio ion A an and corporat ation B B are c conside dered ed memb embers of a controlled ed gr group bec ecause corporation A owns at lea east 80% of corporation B.”

Corporation A Corporation B 80%

Schneider Downs ACA Forms 1094 & 1095 Webinar

Controlled Groups

Mu Mult lti p pare rent-su subsidiar sidiary c controlled g d group e p exam ampl ple

Group 1 p 1 - Co Corpo poration A A, corpo poration B and nd c corpo poration D D are all c cons nsidered m members of a cont ntrolled g group up becaus use A own wns at at leas east 8 80% of corpo poration B B and nd c corpo poration B B owns ns at least 80% of corpo poration D. D. Group 2 p 2 - Co Corpo porations C C and nd E are members of a sepa parate cont ntrolled g group up b becaus use corpo poration C C owns ns a at least 8 80% of corpo poration E.

Corporation A Corporation B Corporation C

55% 85%

Corporation D

80%

Corporation E

80%

Schneider Downs ACA Forms 1094 & 1095 Webinar

Controlled Groups

Brothe her-sister c r controlle

• lled g

group e example le # #1

• Gr

Group 1 - Corporat atio ions A an and B wil ill l be an an ap applic icable lar arge employer under der t the A e ACA because 1 1) fiv ive o

• r f

fewer s shar areholders own at at leas ast 80% %

• f eac

ach corporation (1 (100% of A and 1 d 100% of B), ), a and d 2) ) the e same me f five e or fewer shareh eholder ders own more e than 50% o

• f both corporat

ations, (60%) %) tak aking into ac account identic ical al o

• wnership

ip

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Owner Company A Company B Total Jones 35% 10% 10% Mays 25% 20% 20% Brown 20% 10% 10% Smith 15% 20% 15% White 5% 40% 5% Total 100% (yes) 100%(yes) 60% (yes)

Schneider Downs ACA Forms 1094 & 1095 Webinar

Controlled Groups

Bro rother-sister c controlled g lled group e example le # #2

• Gr

Group 1 - Corporat atio ions A an and B wil ill l not

• t be

e an an ap applic licable lar arge employer under der t the A e ACA because al although 1) five or fewer shar areholders own at at lea east 80% of each ch corporation (1 (100% of A and d 100% o

• f B

B), ), 2) ) the s same me five e or fewer er shareh eholder ders do not

• t ow
• wn mo

more than 5 50% of both corporat ations, ( (45%) tak aking into ac account id identic ical al ownership ip

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Owner Company A Company B Total Jones 45% 10% 10% Mays 5% 20% 5% Brown 30% 10% 10% Smith 15% 20% 15% White 5% 40% 5% Total 100% (yes) 100%(yes) 45% (no)

Schneider Downs ACA Forms 1094 & 1095 Webinar

Controlled Groups

Bro rother-sister c controlled g lled group e example le # #3

• Group 1

p 1 - Corpor

• rations
• ns A

A and nd C C will b be an n appl pplicable large empl ployer und under t the ACA CA because 1) five or

• r fewer shareholders o
• wn a

at least 80% of

• f eac

each corpo poration ( (100% o

• f A

and nd 9 90% of C) C), a and nd 2 2) the s same f five or fewer shareholders ( (of A A & C) C) own n more t than 50%

• f bot
• th corpo

porations, (85%) t taking i int nto a accoun unt identical owne nership

• Group 2

p 2 - Co Corpo poration B B and nd c corpo poration C C will be an applicable l large employer under the ACA because 1 1) five or

• r fewer sharehol
• lders o
• wn at

at l leas east 80% 80% o

• f

f eac each corpo poration ( (100% o

• f

B B an and 100% 00% of C) C), and nd 2 2) the same f five or fewer s shareholders (of B B & C) C) o

• wn m

n more than 50% 50% o

• f

f bot

• th corp

rpora rations, (80%) t taking into a accoun unt identical owne nership

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Owner Company A Company B Company C Total Jones 40% 10% 30% 30%, 10% Mays 25% 20% 20% 20%, 20% Brown 0% 30% 10% 0%, 10% Smith 35% 40% 40% 35%, 40% Total A & B & C 100% (yes) 70% (no) 90% (yes) 85% (yes A & C) Total B & C 100% (yes) 100% (yes) 80% (yes B & C)

Schneider Downs ACA Forms 1094 & 1095 Webinar

Controlled Groups

Be Be aware are o

• f o

f own wnership attrib attribution ru rules

• To
• and

d from pa parents, c childr ldren, grandc dchildr ldren

• To

To and from sp spou

• uses (

(includes s sa same se sex sp spouse ses)

• To

To grant antors and and benef enefic iciar iaries ies o

• f t

trus usts

• To

To benef enefic iciar iaries ies o

• f es

estat ates es

• From compa

panies to i indi dividu duals w with 5 5% ownership

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Schneider Downs ACA Forms 1094 & 1095 Webinar

Affordability Safe Harbors

• Coverage for an employee is “affordable” if the

employee-paid portion of the premium (for the lowest- cost self-only coverage) is not more than 9.56% (for 2015) of the employee’s household income. Since most employers will not know the household income of their employees, they may determine affordability using any of the following three safe harbors:

– Form W-2 Safe Harbor – Rate-of-pay Safe Harbor – Federal Poverty Line (“FPL”) Safe Harbor

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Schneider Downs ACA Forms 1094 & 1095 Webinar

Affordability Safe Harbors

• Form W-2 Safe Harbor

– Under this safe harbor, a large employer can satisfy the affordability requirement if the employee’s portion of the health insurance premium (for the employer’s lowest cost self-only coverage) does not exceed 9.56% of that employee’s Form W-2, box 1, wages from the employer. This is the most common method that will be used by employers.

• Rate of Pay

– Under this safe harbor, affordability is based on the rate of pay as of the beginning of the coverage period (usually the first day of the plan year). For an hourly employee, the monthly wage equals the hourly rate of pay times 130 hours (for a salaried employee, it is the monthly salary). If the employee’s monthly contribution (for the employer’s lowest cost self-only coverage) does not exceed 9.56% of the monthly wages, the employer coverage would be deemed affordable.

• Federal Poverty Line Safe Harbor (“FPL”)

– Under this safe harbor, employer-sponsored coverage is considered affordable if the employee’s monthly cost (for the lowest-cost self-only coverage) does not exceed 9.56% of the FPL ($93.76 for 2015) for a single individual.

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