RE: IMPORTANT ACA NOTICE – PLEASE READ IN ITS ENTIRETY
Dear ACA Employer Reporting Client:
The IRS has released important updates and clarifications in draft form for the 2016 Employer-Provided Health Insurance Forms. Drafts of instructions and publications typically have some changes before being officially released, however we wanted to make you aware of potential changes as soon as possible to allow time for your review and to make updates as necessary.
Here’s what you need to know:
- Transition relief change. Several forms of transition relief were available to employers for 2015 under sections 4980H and 6056, but only limited transition relief will continue to apply in 2016. The draft instructions state that for the 2016 calendar year, the 50-99 Transition Relief and 100- or-more Transition Relief are applicable only if the Employer (or any member of an Employer’s Aggregated ALE Group, if applicable) offers coverage under a health plan with a plan year beginning after January 1, and only for calendar months in 2016 that fall within the plan year that began in the 2015 calendar year. For example, if your health plan year runs July 1 – June 30, you can still qualify for available 2015 Transition Relief through June 30, 2016.
- Authoritative transmittal clarification. An Aggregated ALE Group is all ALE Members (Employer) under common control. Each ALE Member must file its own Forms 1094-C and 1095-C under its own separate employer identification number, even if the ALE Member is part of an Aggregated ALE Group.
- Code changes. Offer of Coverage Code 1I, and Safe Harbor Code 2I are no longer applicable for 2016 Plan Years. New codes 1J and 1K have been added to 2016 Plan Year. A description of these new codes are as follows:
- Code 1J. Minimum essential coverage providing minimum value offered to employee, and at least minimum essential coverage conditionally offered to spouse; minimum essential coverage not offered to dependent(s). (A conditional offer is an offer of coverage that is subject to one or more reasonable, objective conditions. For example, an offer to cover an employee’s spouse only if the spouse is not eligible for coverage under Medicare or a group health plan sponsored by another employer.)
- Code 1K. Minimum essential coverage providing minimum value offered to employee; at least minimum essential coverage offered to dependent(s); and at least minimum essential coverage conditionally offered to spouse. (A conditional offer is an offer of coverage that is subject to one or more reasonable, objective conditions. For example, an offer to cover an employee’s spouse only if the spouse is not eligible for coverage under Medicare or a group health plan sponsored by another employer.)
If you need to change a 2016 Reporting Month that has already been uploaded to TASC due to these Code changes, please email ACAEmployerReporting@tasconline.com for instruction.
While you are reviewing your ACA Employer Reporting materials for these changes, it is also important to review your monthly file spreadsheets for ongoing accuracy. The IRS has indicated that form deadlines will not be extended further, and the good faith effort will no longer apply.
Please confirm the following items are correctly entered into the appropriate columns on your monthly file spreadsheet:
- Correct TASC ID is being used for each reporting group.
- No dashes in employee SSN. (Correct 555555555 vs. Incorrect 555-55-5555)
- Legal first and last name that is filed with the Social Security Administration.
- No nicknames or abbreviated names.
- Most current address information including complete city, state abbreviation, and zip code.
- Correct reporting year (2016) and reporting month.
- Update information month-to-month to ensure accuracy.
- Usage of accurate and available codes.
- Do not use 2015 Transition Relief Codes if they no longer apply for reporting month.
- Review the ACA Client Manual and ACA Wizard if you need assistance.
- You must provide an Offer of Coverage Code for all 12 months.
- If an employee has waived offer of coverage, use 2F, 2G, or 2H based on the Affordability Safe Harbor you have declared.
- Confirm you are reporting the lowest-cost self-only minimum essential coverage providing minimum value that is offered to the employee in the Employee Share column.
- This is the premium of the lowest-cost single option offered, not necessarily the premium Employee may have enrolled in and/or pays.
- If there is no offer of coverage, or Employee does not pay for lowest-cost single premium, report 0.00.
- For terminated employees, you must continue to report the employee each month following termination.
- Update Codes to 1H Offer and 2A Safe Harbor.
- The same codes apply even if employee enrolled in COBRA for the remainder of the year in which the employee terminated.
- If you have a self-insured plan and the employee is enrolled in COBRA following termination, you would report 1H, 2A, but make sure to mark ‘Y’ in the column ‘If SelfInsured-Employee Covered?’.
- If you have a self-insured health plan, list all dependents enrolled in health plan.
- If dependents are not enrolled in your health plan coverage, do not continue to list names, date of births, and SSNs in the monthly file.
Our goal is for you to have a successful 2016 reporting year and we appreciate your help in reviewing your monthly data files to help make this happen!
Note: TASC will need all of your complete and accurate data for 2016 by December 15, 2016 in order to provide all forms to you for distribution by January 31, 2017 and transmit electronically to the IRS by March 31, 2017.
If you have any questions regarding this communication, please contact us at 1-800-422-4661 or by emailing ACAEmployerReporting@tasconline.com.
TASC ACA Employer Reporting