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David L FarrellRegional Sales Director
Paycor Inc
Affordable Care Act Reporting
∗ Who is Paycor
∗ Review of the Affordable Care Act∗ Individual vs. employer mandate
∗ Required IRS filings for employers
∗ Best Practices
∗ Bonus DOL Changes discussion!
Agenda
∗ Founded in 1990 by Bob Coughlan∗ Owner led employee owned∗ 28,000 clients nationwide∗ We serve 1-5,000 employee companies
∗ Suite of services∗ Payroll, HRIS, Time, Onboarding, ATS, some W/C
∗ What we DON’T SELL∗ Health Insurance or 401k (or much W/C)
∗ We’re known for∗ Award winning technology and customer service∗ Helping our clients reduce cost, engage employees, improved
analytics, and improved compliance
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Paycor
∗ Paycor is not engaged in providing legal advice, or tax advice. Consult a legal or accounting professional to ensure you understand your client’s risk with regards to ACA reporting
∗ This information is subject to change as the IRS changes it’s ACA regulations
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Consult a Professional
Review of the Affordable Care Act
• ACA was designed to ensure that Americans have health insurance
• Individuals can obtain insurance two ways:1. Through the Marketplace (tax credits are available for those
who can’t afford it)
2. Through their employer if they work 30 hours or more weekly.
Review of the Affordable Care Act
• IRS needs accountability from employers that they are complying with the law
• They want to know…• Who has coverage
• What kind of coverage they have
• Where did they get it
• IRS wants to make sure employers who are supposed to be providing coverage are doing so—if not, they can be penalized.
∗ ACA added two new
reporting and filing
requirements related to
health insurance coverage∗ Section 6055 deals with the
individual mandate
∗ Section 6056 deals with the
employer mandate.
Required IRS filings
∗ Beginning in 2014, PPACA requires all non-exempt
individuals to either maintain minimum essential coverage
(“MEC”) or pay a penalty as part of their income tax returns
for every month they go without MEC
∗ Section 6055 reporting is necessary to determine whether
individuals are maintaining MEC
∗ Returns must be filed with the IRS and statements
furnished to covered individuals.
Section 6055 & the Individual Mandate
∗ Requires applicable large employers to file returns with the
IRS and provide statements to full-time employees about the
health insurance coverage offered
∗ Information used to determine if the employer has complied
with the Employer Shared Responsibility mandate and to
determine if individual is eligible for premium assistance.
Section 6056 & the Employer Mandate
Applies to all Applicable Large Employers
Reporting Who Reports Transmittal Form IRS Deadline Paycor Filing?
6055 Small Employer with Self-Insured Plan
1094-B 1095-B 1/31 of each year (2/1/16)
No
6055 Insurer 1094-B 1095-B 1/31 of each year (2/1/16)
No
6056 Large Employer with FullyInsured Plan
1094-C 1095-C 2/28 (or 3/31 if filed electronically*)
Yes
6055/6056 Large Employer with Self-Insured Plan
1094-C 1095-C 2/28 (or 3/31 if filed electronically*)
Yes
Required IRS filings overview
*Must file electronically if providing 250 or more *Must file electronically if providing 250 or more
∗ Penalties increased in late July to $250 per return
∗ Up to maximum of $3 million under Sections 6721 and
6722
∗ If the failure relates to both an information return and a
payee statement, penalties are doubled to $500 and $6
million
∗ Special relief for 2015: no penalties will be imposed as
long as the filing entity makes a good faith effort to
comply (clients 50-99 FTE)
∗ However, you don’t want to invite the IRS into your
business.
Penalties for not filing
WHAT INFORMATION IS REQUIRED FOR
THE 1095-C AND 1094-C?
Form 1095-C: Part I
Information about both the employee and employer
Static payroll/benefit admin data
Lines 7-13: Employer information
Comes from client.
Lines 1-6: Employee information including SSN
Line 10: Contact telephone number who the
recipient may call about the information reported
Static payroll/benefit admin data
Form 1095-C: Part II
Client/benefit admin
Client/benefit admin
Client/benefit admin
Line 15: Report the amount of the employee’s share of the
lowest cost monthly premium for self-only coverage
Line 14: Offer of Coverage, for each month enter a “Series 1”
code from the instructions
Line 16: Safe Harbor Codes, for each month enter a “Series 2”
code from the instructions.
∗ All Applicable Large Employers (self-funded or fully-insured)
∗ Line 14 Code Series 1 (Offer of coverage codes)
Information required
CODE DESCRIPTION HOW COMMON
1A MV offered at less than 9.5% of FPL ($93.18/mo) Common
1B Offer to EE only Rare
1C Offer to EE + Dependent (not spouse) Rare
1D Offer to EE + Spouse (non dependent) Rare
1E MV offered to EE, at least MEC offered to spouse & deps Common
1F MEC that is not MV offered to employee Some
1G Self-funded offered to part-time EE Rare
1H No offer of coverage to full-time employee Common
1I No offer to employee but employer using qualifying offer relief ?
∗ All Applicable Large Employers (self-funded or fully-insured)∗ Line 16 Code Series 2 (safe harbor codes)
Information required
CODE DESCRIPTION
2A Not employed any day that month
2B Part-time or termination month when not covered all month
2C Enrolled in coverage (Use over any other code if applicable)
2D EE in non-assessment period (e.g. waiting period)
2E Multi-employer plan interim relief
2F W-2 Safe harbor
2G FPL safe-harbor
2H Rate of pay safe harbor
2I Non-calendar year plan employer transition relief
Form 1095-C: Part III
• This section only applies to
organizations with self-insured plans
Data comes from benefit admin.
Form 1094-C: Part I
Attach all 1095-C filings to
this transmittal form:
Lines 1-6: Employer information
Lines 7-8: Contact information for individual responsible for addressing IRS questions about the form
Lines 9-16: Employer Information
Line 17: Reserved line for IRS use
Line 18: Total number of 1095-Cs submitted.
Comes from payroll/benefit admin
Comes from client
Comes from benefit admin
????
Derived number of 1095-Cs generated from system used for filing
Form 1094-C: Part II
Lines 19-21: For filings where there are related employers and where each is filing for their own group
Line 22: If an employer files under one of the four optional filing methods, the filer discloses which method they are using
Comes from client
Comes from client/benefit admin.
Qualifying Offer
∗ Employer offers MV coverage with employee cost less than 9.5% of FPL ($93.18 in 2015)
∗ Benefits to employer:∗ Enter code 1A in line 14 of 1095 and employer does not have to provide cost of
lowest cost plan on line 15∗ Can provide a simplified statement to employees instead of a copy of the 1095∗ Problem with the simplified statement approach
∗ Employer still has to provide a 1095 to the IRS…why not just give the employees a copy
∗ Self-funded employers cannot use the simplified statement for anyone who has elected coverage
Line 22: special reporting rules
98% Offer
∗ Employer offers affordable MV coverage to 98% of full time
employees
∗ Benefits to employer:
∗ Employer does not have to provide number of full-time
employees by month in column (b) of 1094
Line 22: special reporting rules
Form 1094-C: Parts III and IV
Comes from insurer
Comes from payroll (ALE report)
Comes from payroll (ALE report)
Comes from benefit admin/client.
Comes from benefit admin/client
Comes from benefit admin/client
Column (a): Did employer offer coverage to 95% of full-time?
Column (b): Number of full-time employees
Column (c): Total number of employees
Column (d): Is employer part of a controlled group?
Column (e): Transition relief code•Code A for 50-99 FTE relief•Code B for all other 100+ transition relief
Lines 36-65: Names and EINS of other ALE Members of the
Aggregated ALE Group (if applicable)
What is Paycor doing to help?
• Products that can help • Benefits administration tool
• Time and attendance tracking
• Reporting & Analytics: ACA reporting to help you determine ALE status, employee eligibility and plan affordability
• Filing assistance for 1095-C and 1094-C• We will aggregate information from our systems
• Clients that are not using Paycor’s benefit administration or time and attendance system can import or enter information through a client portal for an additional fee
• We will file the 1094-C and 1095-C forms on the client’s behalf.
ACACompliance
Payroll Data
Open Enrollment/Ben Admin
Time & Attendance
Data
1095 - C
EE info including SSNEE Depending info
including dependent SSNER infoContact numberOffer of CoverageAmount of EE shareSafe Harbor Codes
1094 - C
ER Info - FEINContact NameTotal number of 1095-CsRelated EINsFiling Method SelectedNumber of FTEs
Static Payroll DataEE SSNNumber of FTEs
Offer of CoverageAmount of EE share for Self only CoverageSafe Harbor CodesER InfoTransition Code Relief
Client Data
Name and Contact Number of responsible Person
Control Group Y/NRelated Company EINsOptional Filing Method selection
Reporting
Am I a Large Employer?Which of my Ees are eligible?Are my Benefits Affordable?Measurement, Stability, and
Admin Periods tracking1094-C1095- Cs
PPACA HoursMeasurement, Administrative & Stability Periods
1. Determine how you are impacted by this regulation
2. Create a strategy to complete the tax filings
3. Determine WHO will be responsible for gathering benefit data each month
4. Determine WHO will be responsible for the 1094-C and 1095-C
5. Connect with your local Paycor rep to discuss our ACA Tools
Don’t forget about the New DOL Change for 2016!!
Best Practices
∗ What: The Department of Labor has proposed an increase to the threshold salary level needed to qualify for the white collar exemptions from $455/week ($23,600 per year) to $970/week ($50,400/year).
This means…Under the proposed law, any salaried exempt employee who earns under $50,440 should be also paid overtime pay for any additional hours above 40 per week.
Employees who are affected by this law must be paid overtime for the hours they work above 40 hours per week.
This proposed update is expected to be put into law in early to late 2016. With that in mind, employers should start planning to also do the following
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The New DOL Law
We expect employers to pick between four options.
Do nothing and watch an employee’s annual pay grow.
Adjust employees to an hourly rate. Then adjust the hourly rate based on hours the employee typically works.
Bump up affected employee’s salaries to $50,440.
Mandate no overtime. Manage it profusely.
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Consider your options in 2016
∗ Paycor data shows that 65% of employers have one employee or more who are affected by the threshold increase.
To Do Today
∗ Determine if you are affected
∗ Understand which employees are affected
∗ Determine the hours they work…and start tracking your salaried employees hours now!
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You Need a Plan
