Affordable Care Act

1. Affordable Care Act Reporting and Filing

2. Agenda • Review of the Affordable Care Act • Individual vs. employer mandate • Required IRS filings for employers • How Paycorhelps.

3. Review of the Affordable Care Act ACA was designed to ensure that Americans have health insurance • Individuals can obtain insurance two ways: • Through the Marketplace (tax credits are available for those who can’t afford it) • Through their employer if they work 30 hours or more weekly.

4. Review of the Affordable Care Act The IRS needs accountability from employers that they are complying with the law • They want to know… • Who has coverage • What kind of coverage they have • Where did they get it The IRS wants to make sure employers who are supposed to be providing coverage are doing so—if not, they can be penalized.

5. Required IRS filings • ACA added two new reporting and filing requirements related to health insurance coverage: • Section 6055 deals with the individual mandate • Section 6056 deals with the employer mandate.

6. Section 6055 & the Individual Mandate • Beginning in 2014, PPACA requires all non-exempt individuals to either maintain minimum essential coverage (“MEC”) or pay a penalty as part of their income tax returns for every month they go without MEC • Section 6055 reporting is necessary to determine whether individuals are maintaining MEC • Returns must be filed with the IRS and statements furnished to covered individuals.

7. Section 6055: data required

8. Section 6056 & the Employer Mandate • Requires applicable large employers to file returns with the IRS and provide statements to full-time employees about the health insurance coverage offered • Information used to determine if the employer has complied with the Employer Shared Responsibility mandate and to determine if individual is eligible for premium assistance. Applies to all Applicable Large Employers

9. Section 6056: data required

10. Required IRS filings overview *Must file electronically if providing 250 or more “returns”

11. Penalties for not filing • Penalties range from $30-$100 per return • Up to maximum of $1.5 million under Sections 6721 and 6722 • Special relief for 2015: no penalties will be imposed as long as the filing entity makes a good faith effort to comply • However, you don’t want to invite the IRS into your business.

12. What information is required for the 1095-C and 1094-C?

13. Form 1095-C: Part I Information about both the employee and employer Lines 1-6: Employee information including SSN Static payroll/benefit admin data Lines 7-13: Employer information Static payroll/benefit admin data Line 10: Contact telephone number who the recipient may call about the information reported Comes from client.

14. Form 1095-C: Part II Line 14: Offer of Coverage, for each month enter a “Series 1” code from the instructions Client/benefit admin Line 15: Report the amount of the employee’s share of the lowest cost monthly premium for self-only coverage Client/benefit admin Line 16: Safe Harbor Codes, for each month enter a “Series 2” code from the instructions Client/benefit admin.

15. Information required • All Applicable Large Employers (self-funded or fully-insured) • Line 14 Code Series 1 (Offer of coverage codes)

16. Information required • All Applicable Large Employers (self-funded or fully-insured) • Line 16 Code Series 2 (safe harbor codes)

17. Form 1095-C: Part III Fully insured plan employers do not complete Part III • This section only applies to organizations with self-insured plans Data comes from benefit admin.

18. Form 1094-C: Part I Attach all 1095-C filings to this transmittal form: • Lines 1-6: Employer information • Comes from payroll/benefit admin • Lines 7-8: Contact information for individual responsible for addressing IRS questions about the form • Comes from client • Lines 9-16: Employer Information • Comes from benefit admin • Line 17: Reserved line for IRS use • ???? • Derived number of 1095-Cs generated from system used for filing • Line 18: Total number of 1095-Cs submitted.

19. Form 1094-C: Part II • Lines 19-21: For filings where there are related employers and where each is filing for their own group • Comes from client • Line 22: If an employer files under one of the four optional filing methods, the filer discloses which method they are using • Comes from client/benefit admin.

20. Line 22: Special Reporting Rules Qualifying Offer • Employer offers MV coverage with employee cost less than 9.5% of FPL ($93.18 in 2015) • Benefits to employer: • Enter code 1A in line 14 of 1095 and employer does not have to provide cost of lowest cost plan on line 15 • Can provide a simplified statement to employees instead of a copy of the 1095 • Problem with the simplified statement approach • Employer still has to provide a 1095 to the IRS…why not just give the employees a copy • Self-funded employers cannot use the simplified statement for anyone who has elected coverage.

21. Line 22: Special Reporting Rules 98% Offer • Employer offers affordable MV coverage to 98% of full time employees • Benefits to employer: • Employer does not have to provide number of full-time employees by month in column (b) of 1094.

22. Form 1094-C: Parts III and IV • Column (a): Did employer offer coverage to 95% of full-time? Comes from insurer • Column (b): Number of full-time employees Comes from payroll (Paycor’s ALE report) • Column (c): Total number of employees Comes from payroll (Paycor’s ALE report) • Column (d): Is employer part of a controlled group? Comes from benefit admin/client • Column (e): Transition relief code • Code A for 50-99 FTE relief • Code B for all other 100+ transition relief Comes from benefit admin/client • Lines 36-65: Names and EINS of other ALE Members of the Aggregated ALE Group (if applicable) Comes from benefit admin/client.

23. What is Paycor doing to help? • Products that can help • Benefits administration tool • Time and attendance tracking • Reporting & Analytics: ACA reporting to help you determine ALE status, employee eligibility and plan affordability • Filing assistance for 1095-C and 1094-C • We will aggregate information from our systems • Clients that are not using Paycor’s benefit administration or time and attendance system can import or enter information through a client portal for an additional fee • We will file the 1094-C and 1095-C forms on the client’s behalf.

24. Pricing Price: • Chargeable service with additional fees for aggregating the data in our portal and for filing the 1094-C and 1095-C with the IRS.

25. Summary: Next Steps • Learn the fundamentals- Review the returns and instructions • Determine which reporting requirements and forms apply to your organization • Determine what information you are required to collect and where you’re going to get it, and start collecting it on a monthly basis • Develop a game plan to get information into the system and to handle the filing • Communicate with employees.