Health & Welfare Notes
Vol. 20, Issue 1 January – March 2015
IRS Releases Final 2014 ACA Reporting Instructions and Forms. The Affordable Care Act (ACA) created new reporting requirements under Internal Revenue Code Sections 6055 and 6056. Under these new reporting rules, certain employers must provide information to the IRS about the health plan coverage they offer (or do not offer) to their employees. Employers must compile monthly and report annually numerous data points to the IRS and their own employees. This data will be used to verify the individual and employer mandates under the law.
On August 28, 2014, the IRS released draft instructions for the forms and in early February 2015, the IRS released the final versions of the forms that employers subject to the ACA “shared responsibility” mandate (sometimes referred to as “play or pay”) will be required to file in order to show that the health coverage they offer to their employees is compliant with ACA requirements. The forms are not required to be filed by employers for tax year 2014. The first required filing of these forms is in 2016 for coverage in 2015. These forms include:
Instructions / Forms 1094-B and 1095-B: These forms will be used by entities reporting under Section 6055 as health insurance issuers, sponsors of self-insured group health plans that are not reporting as applicable large employers (ALEs) [employers with 50 or more full-time or full-time equivalent employees], sponsors of multiemployer plans and providers of government-sponsored coverage, to report enrollment information to verify that individuals have minimum essential coverage that complies with the individual coverage requirements. Form 1095-B “Health Coverage” is provided to the IRS and each covered individual (taxpayer). Form 1094-B “Transmittal of Health Coverage Information Returns” is the transmittal form that insurers, sponsors and employers will use to transmit the individual 1095-Bs to the IRS.
Instructions for Forms 1094-B and 1095-B: http://www.irs.gov/pub/irs-pdf/i109495b.pdf
Forms: 1094-B http://www.irs.gov/pub/irs-pdf/f1094b.pdf; 1095-B http://www.irs.gov/pub/irs-pdf/f1095b.pdf
Instructions / Forms 1094-C and 1095-C: These forms will be used by applicable large employers (ALEs) that are reporting under Section 6056, to verify their compliance with the employer “shared responsibility” mandate. Form 1095-C will also be used to establish employee eligibility for premium tax credits if the employer does not offer affordable and adequate coverage. Form 1095-C “Employer-Provided Health Insurance Offer and Coverage” is provided to the IRS and to each employee (taxpayer). Form 1094-C “Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns” is the transmittal form that employers will use to transmit the individual 1095-Cs and, if applicable, report summary information on employee counts and coverage to the IRS.
Instructions for Forms 1094-C and 1095-C: http://www.irs.gov/pub/irs-pdf/i109495c.pdf
Forms:1094-C http://www.irs.gov/pub/irs-pdf/f1094c.pdf; 1095-C http://www.irs.gov/pub/irs-pdf/f1095c.pdf
Employers need to review the final 2014 forms and instructions now to determine what information will need to be tracked during the 2015 calendar year for reporting in 2016. Employers will also need to develop a process for collecting this data and completing the required forms. The IRS will need to publish forms for 2015; it is expected that they will include very few changes and hoped that publication will occur well before the end of this year.The IRS released a new brochure, “Affordable Care Act: Reporting Requirements for Applicable Large Employers,” which discusses the information that employers need to track each month in 2015 to prepare to fill out the new IRS forms in 2016. This brochure is posted on the IRS website at http://www.irs.gov/pub/irs-pdf/p5196.pdf.
A February 2015 alert from Lockton Benefit Group, an insurance brokerage, states “Ideally, technology will take much of the reporting burden off of employers, automating significant portions of the data collection and reporting processes. Unfortunately, technology will not produce accurate reporting without accurate data. In addition, while an employer’s current HR technology solutions may capture the information required for ACA reporting, it is unlikely that the employer has any one system that incorporates all of this information. It is also very likely that gathering the information from various sources and entering it into the required forms will be difficult and time-consuming. Employers that have not done so already will want to discuss with their third-party payroll and benefits administration vendors the extent to which they can handle the required information gathering and reporting.”
Reporting Deadlines. The first reports will be based on 2015 calendar year information and (i) must be furnished to employees and any non-employee participants no later than February 1, 2016, and (ii) must be filed with the IRS on or before March 31, 2016 (February 29, 2016 for paper filers).
FMLA Rights Extended to Workers in Same-Sex Marriages. The Department of Labor issued a Final Rule on February 25, 2015 revising the regulatory definition of spouse under the Family and Medical Leave Act of 1993 (FMLA) in keeping with the U.S. Supreme Court ruling in United States v. Windsor. Workers in legal, same-sex marriages, regardless of where they live, will now have the same rights as those in opposite-sex marriages to federal job-protected leave under the FMLA to care for a spouse with a serious health condition. The Windsor ruling struck down the federal Defense of Marriage Act provision that interpreted “marriage” and “spouse” to be limited to opposite-sex marriage for the purposes of federal law.
Previously, the regulatory definition of “spouse” did not include same-sex spouses if an employee resided in a state that did not recognize the employee’s same-sex marriage. Under the new rule, eligibility for federal FMLA protections is based on the law of the place where the marriage was entered into. This “place of celebration” provision allows all legally married couples, whether opposite-sex or same-sex, to have consistent federal family leave rights regardless of whether the state in which they currently reside recognizes such marriages. The Final Rule’s definition of spouse expressly includes individuals in lawfully recognized same-sex and common law marriages and marriages that were validly entered into outside of the United States if they could have been entered into in at least one state.
This definitional change means that eligible employees, regardless of where they live, will be able to take FMLA leave to care for their lawfully married same-sex spouse with a serious health condition, take qualifying exigency leave due to their lawfully married same-sex spouse’s covered military service, or take military caregiver leave for their lawfully married same-sex spouse. This change entitles eligible employees to take FMLA leave to care for their stepchild (child of employee’s same-sex spouse) regardless of whether the in loco parentis requirement of providing day-to-day care or financial support for the child is met. This change also entitles eligible employees to take FMLA leave to care for a stepparent who is a same-sex spouse of the employee’s parent, regardless of whether the stepparent ever stood in loco parentis to the employee.
The full text of the Final Rule can be found at http://www.dol.gov/whd/fmla/spouse/.
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Disclaimer – This newsletter’s purpose is to inform our clients and colleagues of recent legislative health care-related developments. It is not intended, nor should it be used, as a substitute for specific legal advice.
Health and Welfare Notes is prepared four to six times annually and will accompany Retirement News. If there are questions concerning the information discussed, call richard Gabriel associates and ask for Gabe Zinni, Karen Irwin, Cindy Swartz or Nancy Cunningham.
richard Gabriel associates
Actuarial and Employee Benefits Consultants
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Horsham, PA 19044-2203
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