A number of questions came up during our webinar today, so we thought it might be helpful to post them here. A recording of today’s webinar has been added to the HR videos page. Tomorrow’s webinar will begin at 11:00 AM. We will start by covering the same information on the basic compile/review/edit workflow, and provide time for more Q&A’s.
Deadlines
Q: What is the deadline for mailing forms to employees?
A: March 31, 2016. The IRS added two months to the original deadline.
Paper filing with the IRS is due on May 31, 2016 and electronic filing is due by June 30, 2016.
Non-Calendar Year Plans
Q: If you have a non-calendar year plan, do you need to have that reflected in the Start Month and End month of the medical plan setup?
A: Yes, enter the starting and ending month numbers in the medical plan. This will tell the program when your plan starts, and which months it is ok to report the 2I code in. If you leave the starting month at the default of 1, then no months will have the 2I code. You can edit the medical plan and then re-compile the 1095-C information.
Q: If we have a non-calendar year plan that starts July 1, but we did have some employees enrolled in coverage prior to that, what should be reported on the 1095-C?
A: The 1095-C will report a 2C code for any month that an employee was enrolled, even if it was prior to the start of your plan year. (Of course, you must have the dates that the employees were enrolled on the coverage records.)
Series 1 Codes
Q: Who should provide us the plan information to set up the series 1 codes?
A: Your insurance company can probably help you. The codes basically cover who coverage is offered to, whether it meets the MEC and MV requirements (generally all plans should, unless you have a MEC only plan), and in the case of the 1A code what affordability safe harbor you use. Review the 1095-C instructions from the IRS before contacting your insurance company.
1095-C Part III
Q: We are not a self-insured company, do we still need to report the dependents?
A: No, only company’s that are self-insured need to report the dependents. Dependents are entered on the Dependents tab page of the employee setup window in HR, and only need to be entered if the employee opts for spouse and/or dependent coverage.
When the information is compiled for a self-insured plan, the dependent information on the employee account will be used to fill out Part III of the form, and this information will appear on the Enter/Edit 1095-C window.
Different Offers to Different Employees
Q: We do not have just one plan that is offered to all employees. Should I leave the “Offered to all employees” box unchecked on the employee setup?
A: You should check the box on the plan that is offered to the larger number of employees. This will get the correct series 1 code entered for the majority of your employees. If you have a small number that need a different series 1 code, the best approach may be to edit those forms manually after compiling the 1095-C information. This is true if you may need to manually calculate the employee share for those employees.
One thing to keep in mind is that you might have different plans that are offered to different employees, but if they are all coded under the same series 1 code, you don’t need to worry about using different codes. The “offered to all employees” box is simply used to designate a global plan that will be used to determine the series 1 code. Even if there is a group of employees that technically aren’t offered that specific plan, if the plan that they are offered is going to be reported under the same series 1 code there is really no problem in just letting the program pick up the series 1 code from the plan that you designate is “offered to all employees”.
It is only when different plans requiring different series 1 offer codes that you need to make sure the correct series 1 code gets reported.
If you have a situation where you have a large number of employees that have different offer codes, send us more details on your situation and we will see what can be done to automate the assignment of the series 1 code. For instance, if you have employees in two different states, and each group of employees needs a different series 1 code, we may be able to automate the assignment of the series 1 code based on the state in which the employee works. Or if employees in one department are offered a different plan, the department may be used as the criteria for determining what series 1 code to use.
Under 50 Full Time Employees
Q: A company did not have 50 or more full time employees. Do we still need to report or send them a 1095-C?
A: The requirement to send a 1095-C is based on whether or not an employer is an ALE. An ALE might have fewer than 50 full time employees, but have enough part time employees to put them over the 50 employee threshold (part time employees are converted into FTEs–Full Time Equivalents) and added to your total of full time employees to determine ALE status.
So the answer is determine first whether the company is an ALE. If the answer is yes, then the 1095-C requirement kicks in. The actual number of 1095-C forms that need to be reported however depends on the measurement period that the employer chooses to use. For instance, if the employer uses the look-back measurement period, then the number of full time employees will be reduced for any new employees that are in an initial measurement period for all of the months that they worked for the year. During this time they are not counted as full time employee and will not need to receive a 1095-C. And for any employees that are part time all months of the year, they also do not need to receive a 1095-C.
50-100 Employees Relief
Q: What is the code for ALE that did not have to offer coverage in 2015 due to having less than 100 full time employees?
A: There are no special codes to use on the 1095-C for these ALE’s. Instead, the relief for ALE’s with 50-100 employees is claimed on the 1094-C. The usual codes will apply on the 1095-C. If an employee wasn’t offered coverage and was full time in a month, no code will be reported on the 1095-C line 16. The relief claimed on the 1094-C should prevent the IRS from assessing a penalty.
Decline Entries
Q: We have employees that declined coverage in 2015. In 2016, they accepted. We removed the declines. Is that wrong?
A: Yes, keep the decline records for past year on file. This is necessary for the Compile 1095-C to know that the employee declined for 2015. Otherwise it will leave line 16 blank for the months in which the employee was full time. Re-enter the decline records for those account.
The program does maintain a list of benefit records that were deleted. If you need help determining which records were deleted, call HR support and they can assist you in viewing the delete log entries.
The quickest way to put decline records back into the system is by using the Add Decline button at the bottom of the Benefit Eligibility Review window.
Q: Does one decline record cover all plans offered?
A: Yes, you only need to put in one decline record, it is not necessary to put in a separate decline record for each plan that you offer. A decline on file means that the employee declined coverage in any plan that you offered.
Q: Is there a utility for entering decline records for multiple people? For employees that don’t already have one?
A: Not at present. A list of employees that are missing both a decline and and enrollment record may be added in an upcoming release. Generally we would recommend that any decline entries be entered based on the actual form filled out by the employee when possible, not necessarily on the fact that there is no benefit record at all on file.
Q: If you are using a non-calendar year plan, should 1/1/15 be entered for the default decline date?
A: Yes, since the 1095-C reporting is based on calendar year reporting, you would still enter a default decline date of 1/1/15 when compiling the 1095-C information.
Reviewing 1095-C’s
Q: Does it matter whose operator name is recorded when a 1095-C is reviewed?
A: Not at present; the fact that the 1095-C was reviewed is what is important. Right now, the Print 1095-C option has an option to print only reviewed and unprinted forms, which can be used to print them in batches as they are being reviewed.
If anyone wants to be able to print 1095-C forms that were reviewed by a specific operator, then we could add a selection for the operator name on the Print 1095-C option.
Look Back Measurement Period
Q: If the 1095-C states the employee is seven full time months in 2015 but his measurement period ends February 2016, the code reported is the one that the employee is still being measured and not the 1H, right?
A: When the employee is in an initial lookback period, the 2D code will be reported on line 16 (to indicate an initial measurement period) and the 1H code will be reported on line 14. The employee is not required to make an offer of coverage until the initial measurement period is over in February. If an offer of coverage is made (for instance, during open enrollment) then an offer of coverage code could be reported on line 14 while the employee is still in the initial measurement period.
While the employee is in the initial measurement period, the employee doesn’t count as a full time employee, it doesn’t matter how many hours the employee works each month.
Q: I always assign an employee to “Unassigned” for the ACA Employee Type. Would it select full time or part time?
A: It is likely that most employees entered as “Unassigned” should either be seasonal or variable hour. Assigning an employee to the correct ACA Employee Type is important when the look back method is in use for the program to use the correct logic in evaluating the 1095-C codes that should apply. We may need to create a utility for doing mass changes to the employee status the help customers that don’t have the correct type assigned. (One set of files that we tested has most employees set to Full Time, and they should have been set to seasonal or variable hour.)
Updated with a bonus question:
Q: If we lowered the minimum number of hours to be considered full time in the HR setup window, do we need to change the hours requirement back to 130 hours/month or 30 hours/week before compiling the 1095-C information?
A: No, the Compile 1095-C uses the standard 130 hours per month and 30 hours/week thresholds to consider an employee full time. You do not need to change the settings in the HR setup.
If you have lowered the thresholds, then what you should see when reviewing the 1095-C information is that an employee may be considered part time (2B code applies) but enrolled because he met the lower threshold you used and so a 2C code is reported.
NOTE: If an employee did not meet the requirement for number of hours to be considered full time in any month of the year, but was enrolled in a self-insured plan, then the 1G code will be used on line 14.