Presented by: Darcy L. Hitesman October 29, 2015 It’s All related 1094/1095 Public Sector Filing Details Presented by: Darcy L. Hitesman

Employer Shared Responsibility Payments G-PRS 10/29/2015 It’s All Related… Tracking “Full-time” 1094/1095 Reporting Employer Shared Responsibility Payments

Overview & Comments Forms 1094-C/1095-C Public Sector Two purposes (§§6056 and 6055) Determines what gets completed Public Sector 2016 Filing for 2015 Calendar Year Focus on Key Aspects of the Forms Information needed to complete forms How to complete forms Comprehensive but not exhaustive Not Addressing: Which employers are ALEs Deadlines and methods for filing Notification options and deadlines Penalties for failure to file

Preliminary Steps LET’S DO THIS NOW. Mark sure you are an applicable large employer (ALE) 100 or more FTEs 50-99 FTEs Know what plans are involved Major medical Some HRAs Know whether plan(s) is insured or self-insured LET’S DO THIS NOW.

Preliminary Steps YOU CAN DO THIS NOW. Determine who will be completing/submitting the filing Read and mark final 2015 instructions (issued 9/16/2015) https://www.irs.gov/pub/irs-prior/i109495c--2015.pdf Determine what lines on Forms need to be completed Form 1094-C: https://www.irs.gov/pub/irs-prior/f1094c--2015.pdf Form 1095-C: https://www.irs.gov/pub/irs-prior/f1095c--2015.pdf Cross through lines on Forms not required to be completed Focus on what you need to do YOU CAN DO THIS NOW.

Are You Part of an Aggregated ALE for 2015? G-PRS 10/29/2015 Are You Part of an Aggregated ALE for 2015? “ALE Member” The filing requirement applies to the ALE member Single employer Aggregated ALE Controlled group concept Each employer that is part of the controlled group is an ALE member Some lines are only completed by members of an aggregated ALE

Are You Part of an Aggregated ALE for 2015? G-PRS 10/29/2015 Are You Part of an Aggregated ALE for 2015? TO DO: Map who you provide coverage to Map “related” entities (whether or not provide coverage to) Determine whether part of same controlled group Determine size of aggregated ALE (each ALE member is labeled based on entire controlled group) Identify how many filings and with respect to whom

Designated Governmental Entity (DGE) G-PRS 10/29/2015 Designated Governmental Entity (DGE) Special provision for public sector Allows another public sector entity to file on behalf of an ALE member Not a consolidated return Each ALE member has own set of filings Can slice and dice Designation process In writing and signed by both ALE and DGE DGE agrees to be responsible for reporting on behalf of ALE Identifies categories of employees for which DGE will report

Designated Governmental Entity (DGE) - Example G-PRS 10/29/2015 Designated Governmental Entity (DGE) - Example ABC County is located in Minnesota All county employees eligible for county’s SIHP through service coop ABC County designates service coop as DGE Full designation (i.e., §§ 6055 and 6056 information) Service coop (DGE) files authoritative transmittal for county

Designated Governmental Entity (DGE) - Example G-PRS 10/29/2015 Designated Governmental Entity (DGE) - Example ABC County is located in Minnesota Sheriff’s deputies eligible for PEIP Rest of county employees eligible under SIHP of County (not service coop) ABC County designates PEIP as DGE for sheriff’s deputies eligible through PEIP Partial designation County Files Authoritative Transmittal For County indicating employee level data (including sheriff’s deputies) and rest of county employees PEIP (DGE) files transmittal for sheriff’s deputies eligible for PEIP

Form 1094-C Part I: ALE Information G-PRS 10/29/2015 Form 1094-C Part I: ALE Information Form 1094-C is a “transmittal” form Accompanies 1095-C forms when submitted to IRS ALE Member Lines 7 and 8 identify the person “responsible for answering any questions” Lines 9 – 15 for governmental entities only

G-PRS 10/29/2015 1094 – C Form

Form 1094-C Part I: ALE Information G-PRS 10/29/2015 Form 1094-C Part I: ALE Information Line 18, total number of 1095-C forms transmitted under this 1094-C Can be more than one transmittal Line 19, Authoritative transmittal One transmittal must be designated “authoritative” and report aggregate ALE Member-level data If only one transmittal being filed, it is the “authoritative” transmittal Lines 20 – 22 completed only if authoritative transmittal

Form 1094-C Part II: ALE Member Information G-PRS 10/29/2015 Form 1094-C Part II: ALE Member Information Line 20, total Forms 1095-C for ALE member Compare to Line 18; if single employer filing only one 1094-C, Line 20 should be same as 18

Form 1094-C Part II: ALE Member Information G-PRS 10/29/2015 Form 1094-C Part II: ALE Member Information Line 21, whether part of Aggregated ALE Group (i.e., controlled group) Need to know whether are or are not part of Aggregated ALE Group Document analysis If not part of Aggregated ALE Group, do not have to complete Part IV

Form 1094-C Part II: ALE Member Information G-PRS 10/29/2015 Form 1094-C Part II: ALE Member Information Line 22, Certifications of Eligibility [later slide] Remember – only completing Line 22 if “authoritative” transmittal (see Line 19) The Four Boxes Qualifying Offer Method Qualifying Offer Method Transition Relief Section 4980H Transition Relief 98% Offer method Employer determines whether apply and whether want to take advantage Check all that apply Important: Boxes checked significantly impact what needs to be completed and how.

Section 4980H Transition Relief G-PRS 10/29/2015 Section 4980H Transition Relief 1094-C Part II, Line 22, Box C checked “yes” Special penalty related rules “Transition” because not permanent ALEs with 50-99 employees ALE with 100 or more FTEs Penalty assessable beginning 2015 For 2015, “minus 80 freebies” instead of “minus 30 freebies” Must complete 1094-C, Part III, column (e) Note: Do not automatically get this relief. Must check the box!

Form 1094-C Part III: ALE Member Info Monthly G-PRS 10/29/2015 Form 1094-C Part III: ALE Member Info Monthly Column (a) Minimum Essential Coverage (MEC) Offer Indicator Check “yes” or “no” Where 1094-C Part II, Line 22, Box C checked “yes” Box C is Section 4980H Transitional Relief ALE with 100 or more employees (i.e., penalty assessable in 2015) For 2015, “minus 80 freebies” instead of “minus 30 freebies” Check “yes”

Form 1094-C Part III: ALE Member Info Monthly G-PRS 10/29/2015 Form 1094-C Part III: ALE Member Info Monthly Column (b) Full-time Employee Count If checked 1094-C, Line 22, Box D (98% Offer Method), do not complete Number of full-time employees for each calendar month minus full-time employees in a Limited Non-Assessment Period (LNP) NOT related to full-time employees that took coverage Used to calculate Penalty (a) LNP – Recognized period during which not penalty assessable Examples include waiting period, first month of employment

Form 1094-C Part III: ALE Member Info Monthly G-PRS 10/29/2015 Form 1094-C Part III: ALE Member Info Monthly Use same day each month First day of calendar month Last day of calendar month First day of first payroll period in month Last day of first payroll period in month If the same number for each calendar month, may use “all 12 months” instead of month by month

Form 1094-C Part III: ALE Member Info Monthly G-PRS 10/29/2015 Form 1094-C Part III: ALE Member Info Monthly Column (c) Total Employee Count Total number of employees for each calendar month Full-time, part-time, seasonal, temporary, LNP, etc. NOT related to those that took coverage Use same day each month Same method options as column (b) If the same number for each calendar month, may use “all 12 months” instead of month by month

Form 1094-C Part III: ALE Member Info Monthly G-PRS 10/29/2015 Form 1094-C Part III: ALE Member Info Monthly Column (d) Aggregated Group Indicator Complete if checked “yes” on 1094-C, Part II, Line 21 Line 23 if all information the same for all 12 months Or lines 24 – 35 Complete month by month If check any box “yes”, must complete 1094-C, Part IV

Form 1094-C Part III: ALE Member Info Monthly G-PRS 10/29/2015 Form 1094-C Part III: ALE Member Info Monthly Column (e) Section 4980H Transitional Relief Indicator If checked “yes” on 1094-C, Part II, Line 22, Box D Availability of relief is employer responsibility to determine Code A if qualify for and are requesting 50-99 relief (not penalty assessable in 2015) Code B if qualify for and are requesting 100 or more relief (penalty assessable but lower thresholds for 2015) Cannot be eligible for both

Form 1094-C Part IV: Other ALE Members of Aggregated ALE Group G-PRS 10/29/2015 Form 1094-C Part IV: Other ALE Members of Aggregated ALE Group COMPLETE ONLY IF PART OF AGGREGATED ALE GROUP If checked “yes” on 1094-C, Part II, Line 21 Complete if part of aggregated ALE group at any time during calendar year List top 30 ALE members in descending order based on highest average full-time employees ALE member as defined in instructions If entity in controlled group does not have employees, then not considered ALE member Must also complete 1094-C, Part III, column (d)

G-PRS 10/29/2015 1095 – C Form

Form 1095-C Part I: Employee and ALE Members G-PRS 10/29/2015 Form 1095-C Part I: Employee and ALE Members One for each “full-time” employee Full-time under Health Care Reform Regardless of whether actually covered Full-time employee for any month of the calendar year If self-insured, also for each other employee (i.e., other than full-time) actually covered Because reporting as ALE and as provider If self-insured, also for any other person actually covered Alternatively, can use B series [more later] Lines 7 – 13 need to match Form 1094-C entries

Form 1095-C Part II: Employee Offer and Coverage G-PRS 10/29/2015 Form 1095-C Part II: Employee Offer and Coverage Line 14: Offer of Coverage Look at possibilities listed in 2015 instructions First column if all 12 months Otherwise, each calendar month NOT related to who actually takes coverage; just about the offer

Form 1095-C; Line 14 1A Qualifying offer; matches Line 22 of 1094-C 1B G-PRS 10/29/2015 Form 1095-C; Line 14 1A Qualifying offer; matches Line 22 of 1094-C 1B MEC/MV employee only 1C MEC/MV employee; MEC to dependent children 1D MEC/MV employee; MEC/MV to spouse but not dependent children 1E MEC/MV employee; MEC/MV to spouse; MEC/MV to dependent children 1F MEC not MV to employee or employee plus 1G Part-time self insured for all months of employment 1H “no offer” not offered any or not offered MEC 1I Relates to 1A COBRA clarification. 2015 instructions clarify offer of COBRA to former employee is not an “offer” reported on Line 14. [later]

Form 1095-C Part II: Employee Offer and Coverage G-PRS 10/29/2015 Form 1095-C Part II: Employee Offer and Coverage Line 14 Example: FT employee hired on June 15, 2015; coverage available first of month following 30 days employment June – July 1H for months prior to first coverage month August – December 1E months offered Compare to employee covered for entire year – all boxes would be 1E so use “all 12 months”

G-PRS 10/29/2015 Form 1095-C; Line 15 * Only complete if Line 14 is 1B 1C 1D or 1E Employee’s portion of the cost for self-only lowest cost option What hypothetical employee would pay; not what a particular employee actually pays for his/her coverage selection If self-only of base coverage is 100% employer paid, enter 0.00

Form 1095-C Part II: Employee Offer and Coverage G-PRS 10/29/2015 Form 1095-C Part II: Employee Offer and Coverage Line 16 Example: FT employee hired on June 15, 2015; coverage available first of month following 30 days employment; employee actually enrolls Jan – May 2A June and July 2D (LNP) August – Dec 2C Compare to FT enrolled all year – 2C

Form 1095-C Part II: Employee Offer and Coverage G-PRS 10/29/2015 Form 1095-C Part II: Employee Offer and Coverage Line 16: Applicable Section 4980H Safe Harbor Note: “if applicable” Code 2 series – Safe harbor codes “and other relief” Addresses which to use when more than one applies If none apply, leave blank First column if “all 12 months” Otherwise month by month

G-PRS 10/29/2015 Form 1095-C; Line 16 * Determines exposure for category b Only one code entered event if more than one appears If none apply, leave blank 2A Not employed on any date during calendar month 2B Not a full-time employee for month *if actually covered, use 2C *if don’t know, use 2D 2C Enrolled in MEC 2D Limited non-assessment period 2D trumps 2B 2E Eligible for multiemployer plan [later] 2F, 2G, 2H Using an affordability safe harbor 2I Non-calendar plan year months before 2015 plan year starts [later]