Recently, we hosted a webinar with Claire Manz, Dominion Systems Product Strategist. Our webinar covered new ACA regulations and discussed what steps Dominion is taking to offer new tools and updated assistance to customers dealing with the ACA. This is part 2 of 2. Above is the webinar, below is the transcript.
I have four scenarios that I'd like to go through using employees Blair Hudson, Ross Pearson, Roger McCormick and Katherine Baldwin. We are going to log into our test site so you can see the actual new reporting tools. We will have this new reporting feature added in the next couple weeks that you'll be able to use.
I'm going to start with Blair Hudson. Blair Hudson was hired as of July 15th, 2015. Her company has a 90 day-waiting period, so she will not be an employee for most of the year. Instead, she will be in a limited non-assessment period (waiting period) until that October time when her benefits kick in. Since she wasn't offered coverage for each day of the month, her codes for line 14 and 16 will change a few times. For the months of January through July, we'll use code 1H. Code 1H means there was no offer of coverage. So January through July she was not an employee and there was no offer of coverage. When she was hired in and started her waiting period (August through September) she was still not eligible for coverage and there was no offer of coverage. So, we continue to use 1H for the code. Now for November and December, she was offered coverage. It was a qualified offer, and therefore we can use code 1A because the cost for the single coverage was less than 9.5% of the federal poverty level. (At this time is $93.18 for 2015.) Since we did not use codes 1B-1E, we do not need to complete line 15 at all, and we can leave that blank. For line 16, we now are designating codes 2 series 2, explaining what the reason is behind these codes in line 14. (She was not an employee January through July, so we've used code A.) There are all the codes that are from the drop down that we can use, but we are starting with code 2a.
Now for August through October, we are using code D because she was in her limited non-assessment period. Finally, for November and December, when she actually enrolled in coverage, we used code 2C. Finally, we save that information and it will be stored. Our system stores it whenever you plug in this information, so if you want to get started on employees and you don't have the remainder of the year left or information for the remainder of the year, you can still save this information as you go and you will be able to start completing these forms as of now.
Now let's go back to Ross Pearson. Ross Pearson was actually terminated as of July 13, 2015 and his medical coverage actually ends at the end of the month in which the employee is terminated. Therefore, as of August, his 1095-C requires some different codes in line 14 and 16. Again, January through July we used code 1E. Code 1E is an offer of coverage that is not a qualified health plan, there is minimal essential coverage but there is maybe not minimal value. So we have a different code here for that scenario. Because we've used code 1E, we do need to complete line 15 with the actual cost of the lowest costing single coverage which in this case, was 10102.
For August, when he was no longer actually enrolled in coverage or offered coverage, we need to designate that. For the remainder of the year, we use code 1H. Down in line 16, we give the reason behind line 14, so for January through July, we used code 2C, which is the fact that he was enrolled; we had to code 2C through July. Once it hits August, the reason that there was no offer of coverage was because he was no longer an employee, and therefore we use code 2B just to designate that that employee was not actually an employee at that time.
Roger is actually the CEO. He had qualified coverage and was enrolled throughout the entire year. His is very simple; I hope all of your employees are this simple! All we have to do is use code 1A for all 12 months. This is all-year coverage because as the CEO, he was offered a qualified offer of coverage through the entire year. Since we are not using codes 1B-1E, we do not need to designate anything here in line 15. Since he was enrolled throughout all of 2015, we also will be able to use code 2C in that all-year column which we do not need to complete the remainder of the form.
Katherine Baldwin is an employee of a self-funded health plan. We are going to complete part three for her as well. She and her dependents were offered coverage throughout the year, and she was covered under the plan. However, her children and her spouse were covered on an alternative plan under her spouse's coverage. Unfortunately, as of August, he lost his coverage and needed to join Katherine's plan. Her form is very similar to Roger's because all year, for every month of the year, Katherine was offered a qualified health plan-- so we still use that code 1A in the all-year column. Since it was a qualified offer and 9.5% of the federal poverty level, we do not have to enter in line 15 and then for line 16, this employee was enrolled for the entire year. Line 16 is just concerned about the employee, not the spouse and dependents. In this scenario, we can use all year coverage for the employee. We don't have to worry about the spouse and the dependents. How we capture the information about her dependents and spouse is by clicking this box right here-- “My Company is Self-Insured." Clicking this turns on a link where we can pull up the dependents for Katherine Baldwin and designate their coverage.
Essentially,what we've done is simply highlighted or checked each of the boxes for the months in which the dependents and spouse were covered for that year. We don't have to do anything with Katherine because she's already completed. All we have to do is check the boxes for each month that the spouse and dependents were covered.
I'd like to also point your attention to these social security numbers. For the two children, there are no social security numbers in the system. The IRS requires 3 reasonable attempts to get those numbers from the employee. If you don't have any luck, the date of birth is required.
Now I'd like to do a little side note: keep in mind that these are my personal interpretations of the codes. You may find that you have similar employee situations that required different codes in line 14 and 16. Please refer to the IRS instructions and definitions of the codes on the actual forms to ensure you are filling the forms out correctly.
First things first, you need to know whether you are a large employer or not and your FTE count. You can determine that ALE status either using our calculation or your calculation. You also need to confirm whether you are a self-funded health plan or not; that does make a difference where you need to file. Speak with your broker, insurance company, or third party administrator to define what type of health plan you offer and whether it's qualified minimal essential coverage or minimum value.
You’ll also need to define which employees are considered full-time and require an actual offer of coverage. You can use our insurance eligible tool type in those measurement periods and get the actual employees eligible. To determine who is required an offer of coverage and what codes are needed, I recommend running a deduction report for all of your health plans to see who is enrolled in those plans. You can even add their hire dates and termination dates to help you determine where they might have changes in those code series. Additionally, you’ll need to determine whether you are eligible for the safe harbor rules or the transition relief so you can use the proper codes not only on the 1095-C but on the 1094-C as well.
We plan to offer clients the ability to be able to filter by department, division, and cost center so it makes it easier for you to actually complete similar employees by saving the insurance eligible period page. That will help us and help you determine exactly who is eligible for coverage throughout the reporting year.
We know when an employee terminates their codes will change, so we also want to prompt administrators that when you terminate an employee to also update their 109-C. We also know that employers are currently tracking a lot of this information by spreadsheet, so we are hoping to create a way to import the data that you've already saved and make it a little less cumbersome from duplicating that information. Finally, we are going to be completing the tool for the 1094-C, that cover sheet that also needs to be completed and filed.
End of Webinar. Check back next week to find a new transcript!