ADP Totalsource - Affordable Care Act Reporting and Compliance

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ACA Solutions

TotalSource

2 © Copyright 2015 ADP, LLC. Proprietary and Confidential Information.

Top 3 Concerns of Midsized Business Owners

1 2014 Midsized Business Owners Study

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Increasing Burden of ACA Laws and Regulations


ACA – Broad Human Capital Management Impact

• Cost of complying/data modeling• Fees/fines/penalty assessments

& reconciliation• Certify Annual Health Care Coverage

Report 1095-B/C

• Communication • Employee calls/shared service center• Reporting

• Compliance communication• New plans/wellness/rewards

• Calculating look back period (keep data in sync)

• Affordability calculation• Prepare and distribute new annual report

(6055/6056)• Collecting hours of service

• Integration• Security• System updates/change management• Data recordkeeping • Reporting

• Receive and reconcile IRS penalty estimates and appeal where appropriate

• Auditing

• Stay current on complex regulations• Interpret law – Federal & State

Exchange changes• Ensure legal compliance

• Verification of inquiries from Exchanges

• Receipt of notices from Exchanges• Management of reporting deadlines/

period management• Administrative challenges• Staff to meet demands


Shared Responsibility Decisions and Potential Penalties

Did the employer have, on average, 100 in 2015 (50 in 2016) ACA full-time employees plus full-time equivalent employees in the prior year?

Does the employer offer minimum essential coverage (MEC) to at least 70% in 2015 (95% in 2016) of its ACA full-time employees?

Does the plan provide coverage of at least60% minimum value?

For lowest cost self only coverage, would any full-time employees pay more than 9.5% of current Box 1 W-2 Wages, Rate of pay, or Federal Poverty Level

The penalty (assessed monthly) for not offering coverage is the number of full-time employees (minus 80 in 2015; 30 in 2016) times $2,000 annually.

The penalty (assessed monthly) for failure to offer minimum value and/or affordable coverage is a $3,000 annual penalty that will be due for each full-time employee receiving a subsidy, up to a maximum of the total number of full-time employees (minus 80 in 2015; 30 in 2016) times $2,000.

Penalties do not apply to small employers.

Those employees may be eligible to receive a premium tax credit to buy coverage in the health insurance Marketplace.

Did at least one employee receive a premium tax credit or cost-sharing subsidy in a Marketplace/Exchange?

No penalty payment required.

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Your ACA Blueprint: Form 1095-C and 1094-C

Who are your company’s full-time employees? For variable hour, seasonal and part-time employees, employers may utilize Measurement Periods to determine full-time status

New employeesEmployees “reasonably expected” to be credited with 30 hours or more per week, or 130 hours or more per month, need to be offered coverage within the first 3 months of employment (no Initial Measurement Period)

New employeesEmployees not “reasonably expected” to work 30 hours or more per week, or 130 hours or more per month, can be included in Initial Measurement Periods (IMP) to determine full-time or part-time status

Ongoing employeesEmployees may be included in Standard Measurement Periods (SMP) to determine full-time or part-time status

STOP

2STEP

Continue to next step Continue to next step

© Copyright 2015 ADP, LLC. Proprietary and Confidential Information.

What is your company’s applicable large employer status for 2015?Determine the number of full-time employees – including full-time equivalents (FTE’s) based on at least 6 consecutive months of 2014 payroll data.

Less than 50 FTE’sNot subject to Employer Shared Responsibility requirements, including reporting

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Continue to next step

100 or more FTE’sMinimum Essential Coverage (MEC) must be offered to full-time employees during 2015 to avoid penalty. Forms 1094-C and 1095-C are required

50 to 99 FTE’sNo penalties for non-compliance with Employer Shared Responsibility during 2015, but Forms 1094-C and 1095-C are still required

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Your ACA Blueprint: Form 1095-C and 1094-C

5STEP Is your company part of an aggregated ALE group?

The IRS instructions for Forms 1094-C and 1095-C define an aggregated ALE group as “…a group of ALE members treated as a single employer under section 414(b), 414(c), 414(m) or 414(o) of the Internal Revenue Code.”

4STEP Is your company fully-insured or self-insured?


Fully Insured• Only parts I and II of Form 1095-C are completed for

full-time employees• Insurance carrier will issue Form 1095-B to each

covered employee and include information on any covered spouse or dependents.

Self-Insured• Identify spouses and dependents of full-time employees who are

offered coverage• Identify any non-full-time employees who are enrolled in health

coverage offered by your company (for example, former employees enrolled in coverage through COBRA)

• Parts I, II and III of Form 1095-C must be completed for all full-time employees

3STEP What is the lowest-cost, self-only, minimum value coverage offered to each of your

company’s full-time employees?


• Set up benefit plans and plan classes for employee self-only coverage options• After appropriate verification, certify that benefit plans and plan classes provide minimum value coverage• Determine all benefit plans and plan classes in which the employee is eligible to enroll• Verify the cost to the employee of each coverage option

© Copyright 2015 ADP, LLC. Proprietary and Confidential Information.

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TotalSource Offers Simplified, Holistic ACA Compliance

• Cost-effective access to high-end robust coverage offerings through the ADP TotalSource Health and Welfare Plan– Attract top talent– Reduce employee turnover– Effectively manage costs

• ADP TotalSource maintains fiduciary responsibility for the Plan and provides full plan administration

• Full support in complying with ACA

© Copyright 2015 ADP, LLC. Proprietary and Confidential Information.8


TotalSource Services and Resources

• HR Business Partner consultation on ACA compliance

• Access to the TotalSource Consultation Tool leveraged by HRBP

• Access to real-time ACA dashboards detailing Affordability and FTE status

• Core ACA responsibility (all clients, regardless of size)

• Employer Shared Responsibility Provision (Applicable Large Employer, 50 or more full-time employees, including full-time equivalents)

• Assist with insurance marketplace notice to employer in evaluating employee eligibility for subsidized marketplace coverage

• Nondiscrimination consultation, guidance and testing on fully insured health plans*

• Administration and evaluation of Excise Tax on high-cost coverage*

• Auto enrollment administration for employers with 200 or more full-time employees*

• ADP will complete and submit your annual 1094-C & 1095-C on your behalf

*Regulations pending.

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ACA Annual Reporting

The Trade Preferences Extension Act• Signed into law June 29

• Increased penalties all information returns, including Forms W-2 and 1099, and the ACA reporting Forms 1094 and 1095

• Mandated for employers that are considered applicable large employers

• 50+ FTE

• Penalties for failure to file have been increased to $250 per form to a cap of $3,000,000


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Simplifying ACA Compliance


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ADP Totalsource - Affordable Care Act Reporting and Compliance