Monthly Archives: December 2015

Today the IRS and Treasury Department released guidance extending some of the Affordable Care Act reporting guidelines.  Simply put, the extensions will allow for the following:

• Employers will have an additional two months (until the end of March 2016) to provide employees with the forms 1095-B and 1095-C, and
• Employers will have an additional three months to file with the IRS.  
  • New paper form filing deadline:  May 31st, 2016
  • New e-filing form filing deadline:  June 30th, 2016

To learn more you can see the actual guidance by clicking here.

A common question in the marketplace is ‘what exact information is necessary to complete the Affordable Care Act (ACA) reporting’, which is required for employers for the first time regarding the 2015 calendar year.  To assist, we have created a list below of the types of data necessary as well as who will likely have that information.  

Many employers and benefit brokers originally made the assumption that ACA reporting would best be performed as an additional function of a company’s payroll provider.  However, now as the time comes to actually perform the reporting they understand that ACA reporting requires much more benefits information than payroll.  

Just like most things Affordable Care Act (ACA) related, there is a significant amount of confusion about how the ACA reporting extension works.  Hopefully this article will help …

The first thing you need to know is that there are actually TWO DIFFERENT extensions employers need to know about.

• First, you can receive an extension by sending the required ACA reporting to the IRS
• Secondly, there is a completely separate process to request an extension regarding providing the forms to your employees

1).  As an Applicable Large Employer (ALE), employers must file the appropriate forms 1094 and 1095 with the IRS.  Should you need additional time submitting the data to the IRS by the March 31st e-filing deadline, you can receive an automatic 30-day extension by completing Form 8809.  More information here…

2).  The form 8809 does not apply to providing forms to employees however.  To ‘possibly’ receive any extension in providing the appropriate forms 1095 to your employees, and employer must send a letter to the IRS requesting an extension  (full instructions on how at the bottom of this article).

Finally, many are relying upon the ‘Good Faith Effort’ provision that the IRS has issued in regard to their 2015 ACA form filings.  However, it is important to know that this provision does not apply to timely providing forms to recipients or the IRS.  For employers who do not provide timely notices to the IRS or recipients, they will face the penalties prescribed by the law.

Instructions on Extensions of time to furnish statement to recipients. You may request an extension of time to furnish the statements to recipients by sending a letter to Internal Revenue Service, Information Returns Branch, Attn: Extension of Time Coordinator, 240 Murall Drive, Mail Stop 4360, Kearneysville, WV 25430. The letter must include (a) filer name, (b) filer TIN, (c) filer address, (d) type of return, (e) a statement that extension request is for providing statements to recipients, (f) reason for delay, and (g) the signature of the filer or authorized agent. Your request must be postmarked by the date on which the statements are due to the recipients. If your request for an extension is approved, generally you will be granted a maximum of 30 extra days to furnish the recipient statements. For purposes of requesting an extension of time to furnish the statements, the term filer means the ALE Member, or the Designated Government Entity, if applicable.

If you are a benefit broker you might be in for a special 2015 Christmas surprise but not in a good way.  A question for you:

• Did any of your clients use their payroll vendor to do this reporting? (answer is usually yes)
• Have you heard from these clients yet? (answer is usually no)

You need to know that you will hear from them very soon. Why? The reason is twofold.

First, the payroll vendor almost never has all of the information necessary to complete the reporting from a medical plan standpoint.  Instead, they require their clients to enter that data and do not provide much support to assist them (unless you consider forwarding along the IRS regulations as ‘support’).  The clients of course do not know how this all works…

Surprise! You as a broker end up doing the work to help your clients while the payroll vendor receives their compensation for ‘doing’ the ACA reporting.

Secondly, with many payroll vendors they require the employer to actually determine and enter the codes in lines 14 and 16 of form 1095-C. The employer of course thinks that they have paid someone else to do this reporting, so what are they doing? You guessed it – they are sending it back to their broker to do.

This is creating major issues for brokers because often times they made the referral for the payroll company to perform this reporting not understanding that the reporting requires much more benefits information that it does payroll information.  Adding additional pressure, it is now late December 2015 and there are very few vendors in the marketplace still taking clients.

So what can you do about it?

1. Determine which clients are using payroll vendors and call them immediately to make sure they have begun the process and understand everything that is required.
2. Evaluate where you are in terms of your clients ….. and what will be needed to get their required information completed.

Need help?  Contact us at customer support via the link above OR learn more about our ACA consulting services for groups have had had their ACA reporting completed by another vendor, by contacting support.

Many municipal and other governmental entity types have been surprised by the fact that their Designated Governmental Entity has not reported all of the necessary information to the IRS as they assumed would happen.  Under the Affordable Care Act (ACA), Applicable Large Employer (ALEs) must report to the IRS on the type of plans that were offered to their employees, the costs of these plans, and who was covered under the plan.  For some governmental groups (we will call these ‘primary’) they might have a separate governmental entity that has some of their employees covered and who have agreed to perform the ACA reporting on behalf of the ‘primary’ group.

Example:  A school district has all of their teachers covered under the State medical plan, but all other staff covered under a separate plan.  The State has told the school district that ‘we will perform the reporting for you’. This is normally very misleading to the school district because the State health plan normally only intends to report to the IRS who was covered under the medical plan, and NOT the offer of coverage.

For those of you familiar with ACA reporting, the State health plan in this instance normally will report medical plan enrollment but NOT report the other necessary Offer of Coverage that shows up in lines 14, 15 and 16 of form 1095-C.  The end result is that the school district has not reported fully to the IRS and are now subject to penalties.

So what can you do ….

#1.  If you have a Designated Governmental Entity that is performing some of your reporting, you need to ask them if they are reporting for the Enrollment on the plan, OR ALSO the offer of coverage.  Understand it is unlikely they will report the Offer of Coverage.

#2.  If the DGE is only reporting enrollment, they will complete that on form 1095-B.

#3.  The underlying school district in our example still must complete forms 1095-C on these teacher employees, sections 1 and 2.

Need assistance?  Reach out to our customer service department by clicking contact us at the top of the page.