ACA Reporting for 2016 (Part 1)

The following is Part 1 to a transcription from an ACA Demo done by our Product Strategist, Claire Manz. The recording can be found here.

Good afternoon everyone, thank you for joining us. Today we are going to discuss ACA reporting for 2016. I’m sure all of you are aware of reporting for the Affordable Care Act. If you are not, I suggest you reach out to us and we can give you all the gory details. However, at this point, I would like to go through an overview of the forms and give everyone a refresher. I want to make sure everyone is aware of the changes, as well as some of the updates to our platform that we’ve been releasing throughout the year. 

Forms 1094 and 1095

First things first we’ll look closely at the 1094 and 1095 forms. These are the two different forms that we will be filing, which is the requirement of the 6056 and 6065 filing for the IRS. They are essentially the W-2 and W-3 of benefits and report to the IRS that your employees were offered an affordable method of health insurance. There are 1094- and 1095-B forms and 1094- and 1095-C forms. The 1094-B forms are the forms that the insurance carrier will typically submit. Those are provided to your employees by the insurance company. The C forms are the forms that you as the employer, or plan sponsor, are required to file to the IRS and your employees. So the C forms are the forms that you want to pay attention to, and that is where we, your vendor, can help to make this process as efficient as possible. 

One of the major questions you everyone is asking is “who is required to file.” There was a lot of discussion over the last 5 or 6 years when the Affordable Care Act was signed into law on who actually had to supply this reporting to the IRS and their employees. Generally speaking, if you have 50 or more full-time equivalent employees (FTEs) than you must file the 1094 and 1095s to the IRS. Those of you that are self-funded or have under 50 FTEs might not have to file. If you don’t know your FTE count, we do have a calculator within our platform that is available to all of our clients, whether or not you have completed ACA reporting with us in the past. If you are over that 50 FTE threshold, you are considered to have Applicable Large Employer (ALE) status. This calculator will break down your employees and their hours and determine your FTE status. It will then give you a trending average over the last 12 months to determine if you are an ALE. So again, if you have 50 FTEs or more, you will have to file those 1094- and 1095-C forms.

Form 1094

The 1094-C is the employer transmittal, so that form is similar to a W-3 form. This is really the employer informational form - essentially a cover sheet. This is what we’re filing to the IRS to say “This is who I am, this is the information that I have provided to my employees, these are the benefits that I provided, and I am/am not a part of an aggregated group.” 

Aggregated Groups

If you are a smaller employer that is part of a larger employer, you may still have to file even though you are under that 50 threshold. Even if you are under 50 FTEs, if you are part of an aggregated group in which you are commonly controlled or commonly owned, then you may still have to file. Keep this in mind because a lot of people who fall into this category have questions about whether or not they had to file. If you are unsure, I suggest you talk to your employer about whether your company is part of a commonly controlled group. If so, you do need to complete a 1094 for yourself as a single and file underneath all those different companies that you are attached to. 

Form 1095

The 1095-C is the offer of coverage to the employee. This is the employee form that you are going to file for the IRS and submit to the employee. This form is considered the W-2 of employee benefits. Part 1 contains the employee’s information, which is pretty straight forward because we, and you as a client of Dominion, already have it in the system, so it’s not something that you have to complete. We can transfer all the information over to the 1095 easily. Part 2 of this form is the offer of coverage. This is where a lot of work is involved because we have to determine what codes apply to which employee. 

Part 3 is for those employees that are self-funded. If you are self-funded you will need to list each individual that is covered by that employee’s insurance. If you are self-funded, you will need to gather that dependent information and make sure it is in our system. We can help you do that by a dependent import. If you were fully insured last year and this year you are self-funded, we do need to know that so we can help you get that information loaded for us so we can get to those forms.

ACA Within Our Software

If you are a Dominion client, but you have not used us for ACA reporting, you will not have access to our ACA dashboard. If you are interested in using us for ACA reporting, let us know and we can get you signed up and get you access to that part of the system. If you do use ACA reporting with us, when you go to your ACA dashboard you will see is an overview of your processes for the 1094 and 1095 reporting. First of all, I can see my FTE status, so I will know whether or not I have to file. Keep in mind that if the number is under that 50 threshold you may still be part of an aggregated group and still be required to file. 

While you’re on the dashboard you want to make sure you have the correct contact person listed. This will be something that we default from the rest of the system, so if you have a designated contact person in our system, this will default here. We can change that, however, if you have a different administrator who will handle the ACA reporting questions and reporting information, but otherwise, we will default it for you. What we have on this dashboard is just an overview of the 1095 data completion. For those of you who took advantage of this dashboard and advantage of the 1095 reporting, you have been able to complete employee records since January. However, you most likely had plenty of other things going on then, including ACA reporting for 2015, and have not addressed this year’s 1095. Either way, you will see an overview of what you have completed and what tasks you have remaining. 

If you have not completed anything yet, these will show up in a different color warning you to complete the 1095 information. The same thing goes for the 1094. There is a progress bar for you so you always know where you stand. This gives you an overview of the required information and the process you have to go through. We want to make sure you have the ability to see where you are and what you have completed. 

Finally, we have an e-filing printing status. We wanted to make sure that you, as a client of Dominion, know where we are in this process of ACA reporting because there is a lot that we do in the background on your behalf. There’s an auditing system that will catch any errors for both the 1095 and 1094 and there is a required action field that will warn you when it’s time to print your forms and send to the IRS. You will also see when we have sent these specific forms to the IRS and when they have been completed. This gives you a great idea of the process and where you stand. We want complete transparency so that you don't have any questions or issues with filing. 

ACA links are also available to provide you with tools such as ALE Status, FTE Detail, Insurance Eligibility for Employees, etc. These are great tools to determine eligibility and who actually has to receive a 1095 Form because anyone who works over 30 hours per week on average must receive a 1095 regardless of whether or not you offered them insurance (which you should have done to stay in compliance.) 

Read Part 2 here!