ACA Statements Due 3/31 – Double-Check
Did you provide a Form 1095-C or 1095-B statement to every individual entitled to one? You have one week left before the deadline for 2015 statements. This is a good time to quickly check your compliance.
By March 31, 2016, all employers who qualify as applicable large employers (ALEs) are required to provide Form 1095-C information statements to current and former employees, and if self-insured may also need to provide Form 1095-B information statements to other eligible individuals (see our prior alert here). Here are some reminders of items you might have missed:
- Employers Entitled to Transition Relief Must Comply. Even if you were exempted from having to offer coverage for 2015 because you satisfied the requirements for transition relief that was offered to employers with 50-99 full-time equivalents, or exempted from offering coverage for a portion of the 2015 year because you offer a non-calendar year plan, you must still provide Form 1095-C statements covering the entire 2015 year to your full-time employees. Also remember that one of the conditions to entitlement to transition relief is that you certify that you meet the transition requirements on your 1094-C transmittal form.
- Full-Time. You must provide a statement to every employee or former employee who qualified as "full-time" for any calendar month during 2015, regardless of whether they were offered and/or accepted health coverage. "Full-time" for ACA purposes generally includes any employee credited with at least 130 hours during a calendar month or, if you are using the look-back method to identify full-time employees, any employee determined to be full-time for the applicable stability period. The ACA classification may be different than how your company labels someone as “full-time” for other purposes.
- Employees Who Work for Two or More Locations. If an employee works for two or more related employers or different divisions of your company that are separately preparing their own forms (e.g., an employee who works at two restaurant locations), you must coordinate and only provide one form to the employee (generally, the employer with more hours is responsible).
- No Offer of Health Coverage. If you don't offer health coverage to certain groups of employees, you can not claim the Limited Non-Assessment Period for anyone in those groups. The Limited Non-Assessment Periods (such as the 3-month non-assessment for new full-time employees, or the new hire measurement period for new variable hour employees) are indicated on Line 16 and generally exempt you from having to count that person in determining your compliance. So, for example, if you exclude all call-center employees from your health plan, you would report them as not having received an offer of coverage and no limited non-assessment period would be reported to exempt you.
- COBRA Participants. Remember that if your health plan is self-insured, you need to report this coverage to former employees and their spouses and dependents who elect to enroll in COBRA coverage through your plan. If you use a third-party COBRA administrator, you may need to manually obtain the necessary information and prepare these returns. If non-employee spouses or dependents have separately elected COBRA coverage, you may need to provide them a separate Form 1095-B to report the coverage.
- Staffing Company. If you use a staffing company, PEO, temp agency, or similar outside provider of workers, you have a duty to provide a statement to any individual who is considered your "common law employee." This determination is based upon who has primary direction and control, not on what you have agreed in your contract with the provider. (You also have a duty to make an offer of group health coverage to these individuals who qualify and you can only take credit for the outside providers offer of health coverage if your contract contains specific language required by the ACA).
- Union Employees. If you employ union employees for whom you make contributions to a multiemployer (union) health plan, you still have the obligation to track the employees' full-time status and to determine whether reporting is required. Special rules will allow the union plan to handle the reporting for employees offered its coverage, but you should make sure this has been clearly agreed to in writing and that it has been done. Where the union plan handles reporting for some employees, remember that you must still file one combined transmittal report on Form 1094-C that covers all employees, including the union employees.
- Transmittal Requirement. You will need to file copies of all Forms 1095-C, along with the Form 1094-C transmittal report with the IRS by May 31, 2016 (or June 30, 2016 if filing electronically).
You may want to take steps to make sure that employees understand the forms that they are receiving, such as (a) include an explanation with your forms, (b) appoint a primary contact person to field telephone calls from employees and others who have questions about their statements, (c) include a reminder to employees with paystubs or via email, and/or (d) if you are fully-insured, reminder employees that they will also receive a Form 1095-B from the insurance company.
Nelson Mullins Executive Compensation and Employee Benefits attorneys are ready to assist with your compensation and benefits related matters in a cost-effective and responsive manner. Please contact one of our Executive Compensation and Employee Benefits partners or the Nelson Mullins attorney with whom you work.
This Comp & Benefits Brief is a periodical publication of Nelson Mullins Riley & Scarborough LLP and should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general information purposes only, and you are urged to consult a lawyer concerning your own situation and any specific legal questions you may have. ©2016 Nelson Mullins Riley & Scarborough LLP. All Rights Reserved.
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