Here are a few more Q&A’s on ACA reporting. We will continue to add posts as we field questions. Keep in mind that our search page on our website indexes our blog as well. Google does a pretty good job at returning relevant results, so you can always type in your question on the search page to see if a question has already been answered in one of our Q&A’s or in one of the Preparing for 1095-C Reporting posts.
Coverage for Owners/Non-Employees
Q: Coverage was provided to the owners (or other related personnel) of the company, but a 1095-C was not generated for them. How do we generate a 1095-C for the owners?
A: It is likely that the owners do not need a 1095-C form. Unless they receive a pay check, they are not considered employees of the company and do not fall under the 1095-C reporting requirements. Since they are not employees, the owner do not fall under the requirement to receive an offer of coverage, so the employer does not need to document that such an offer was made. Since the owners received coverage through the company’s insurance plan, they do no need the 1095-C form to demonstrate eligibility for subsidies received when enrolling in coverage through an exchange.
The exception would be if owners are covered under a self-insured plan. In this case, the 1095-C is required because the owners and any dependents covered must be listed on Part III of the 1095-C. It may be necessary to manually enter the 1095-C for owners in this instance. This should be done as a last step in your workflow before printing the forms. That is because if you manually enter the 1095-C form and later recompile the 1095-C information for all employees, the manual entries will be deleted along with all of the other entries.
If the coverage is provided by a fully-insured plan, then the owners will receive a 1095-B from the insurance company to document their coverage. This form is used in filing their own personal income taxes.
Dependents Not Appearing on 1095-C Part III
Q: After compiling the 1095-C information, the dependents do not appear on the Part III section of the 1095-C on the Entry/Edit window. Why aren’t they appearing?
A: Dependents only need to be reported for self-insured plans, for the employees that actually enrolled in coverage. If your plan is fully-insured, no dependents should appear on Part III of the form.
There are several things to check if you have a self-insured plan.
First, if your plan is self-insured, make sure that you have checked the “Self-Insured” box on the medical plan setup. If you offer different plans and one is self-insured and the others are not, make sure the box is checked or unchecked for each plan as needed.
If you have checked the “Self-Insured” box on your medical plan setup, then the employee should always be listed on the first line of Part III when enrolled in that plan. If the employee shows up in Part III but the dependents do not, that is an indication that your plan setup is ok and there is another reason for the dependents not showing up and you need to check the following possibilities.
Second, if an employee opted for spouse or dependent coverage, make sure that the enrollment record on the Health Benefits tab page has the spouse and/or dependent coverage boxes checked. If these are not checked, then the program has no idea that the dependents need to be reported.
Third, make sure that you have recorded the employee enrolled in the correct plan if you offer multiple plans. If the benefit record shows the employee enrolled in a fully-insured plan and had spouse and/or dependent coverage, the spouse and/or dependents will not be reported. If the enrollment record is in error, and the employee actually enrolled in your self-insured plan, change the benefit record and recompile the 1095-C information.
Fourth, make sure that you have entered the dependents on the Dependents tab page of the HR Employee setup window. Obviously if you have not entered the dependents, there is no way for the program to put them on the form.
Fifth, if the dependents are entered on the employee account, make sure that the “Insured” box is checked on each dependent that was enrolled in coverage.
Sixth, if an employee added spouse or dependent coverage at some point during the year, and previously had self-only coverage, you must make sure that the appropriate coverage records are entered on the Health Benefits tab page. There should be one record for the period when the employee had self-only coverage with the dates when that coverage was in effect and the spouse coverage and dependent coverage boxes unchecked. A second record should be entered for the period when spouse and/or dependent coverage was added, with the appropriate spouse/dependent boxes checked and the dates for when that coverage was in effect. That way, the program knows which months to check the boxes indicating coverage for both the employee and the dependents.
Finally, there is a limitation to the dependent tracking in the current version of the HR program. Enrollment dates are tracked at the employee account level, not at the individual dependent level. If dependents are added/removed from coverage at times other than the enrollment start and end dates entered on the health benefit record, you will need to manually edit the boxes in Part III to indicate when those dependents were added/dropped from coverage. If you import coverage information from your insurance company and they are providing enrollment dates for each dependent, then this should not be necessary.
Medical Plan Setup
Q: What amount do I enter for the Employee Share in the Prior Year Costs tab page? Do I need to enter the prior year costs for each of my medical plans?
A: In general, you do not need to enter the employee share for each of your medical plans. Lines 14 and 15 are concerned with what plan was offered to the employee, not with what plan the employee signed up for. The line 15 amount for the employee share is not based on what plan the employee actually enrolled in. You are only required to report the cost for the plan that was offered to the employee to comply with the ACA’s requirement that employers offer a plan that is affordable, includes Minimum Essential Coverage and provides Minimum Value.
Remember, if you use the 1A code on line 14, then no amount will be reported on line 15. In this case, it is not necessary to enter any amount for the employee share, even if the employee contributed to the premium cost of coverage.
Q: During open enrollment this past fall, an employee declined coverage and we entered a decline record on the Health Benefits tab page. The employee also declined coverage the year before during the prior open enrollment period. But we did not put in a decline record on his account for the prior year’s open enrollment. Do we need to enter a decline record for last year’s open enrollment?
A: Yes, enter a decline record using the date that the employee declined for the prior year’s open enrollment. That decline record will apply to the months from that point forward. If there is no decline record, then the program will have no idea that coverage was offered to the employee and it will not report the affordability safe harbor on line 16 for those months where the employee was full time.