1. For a copy of the following presentation, please visit our website at www.UBAbenefits.com. Go to the Wisdom tab and then to the HR webinar series page.

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3. This presentation provides general information regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel concerning those circumstances. Indeed, health care reform law is highly complicated and it supplements and amends an existing expansive and interconnected body of statutory and case law and regulations (e.g., ERISA, IRC, PHS, COBRA, HIPAA, etc.). The solutions to any given business’s health care reform compliance and design issues depend on too many varied factors to list, including but not limited to, the size of the employer (which depends on complex business ownership and employee counting rules), whether the employer has a fully-insured or self-funded group health plan, whether its employees work full time or part time, the importance of group health coverage to the employer’s recruitment and retention goals, whether the employer has a collectively- bargained workforce, whether the employer has leased employees, the cost of the current group health coverage and extent to which employees must pay that cost, where the employer/employees are located, whether the employer is a religious organization, what the current plan covers and whether that coverage meets minimum requirements, and many other factors. 3

4. Kathleen Barrow, Shareholder, Jackson Lewis, P.C. o Over 20-years experience in ERISA employee benefit, executive compensation and employment-related tax matters o Practice focuses on employer and plan defense of IRS and DOL audits of plans, payroll and compensation systems o Over 10-years experience litigating employee plan and compensation-related tax issues before the United States Tax Court, US District Courts and Courts of Appeal o Has trained over 5000 employers nationwide on issues arising under the Affordable Care Act 4

5. The Patient Protection and Affordable Care Act (“ACA”) requires: Individuals to maintain minimum essential coverage (subject to certain exemptions); and Applicable Large Employers to offer full-time employees and their dependents minimum essential, affordable coverage with minimum value In order to assess penalties for failing to comply, the ACA mandates the certain reports be published to covered persons and submitted to the IRS 5

6. Reports are due from applicable large employers (“ALE”) whether or not they had 99 or less full-time + full-time equivalent employees and are entitled to transition relief o Applicable Large Employers are those with 50 or more full-time equivalent employees Reports are due from non-ALEs if they have self-funded health plans ALEs must report on offers of coverage for all full-time employees and for certain non-full time employees o New employees in initial measurement period o Variable employee in standard measurement period o Full-time employees in 90-day waiting period o COBRA coverage recipients if they accepted offer—first year only for fully-insured plan o Retired employees—first year only if covered by fully-insured plan o All covered persons if the ALE’s plan is self-funded 6

7. Code section 6056 mandates ALEs make reports to the IRS regarding their full-time employees and health plans o ALE must file a Form 1094-C (summary information) with IRS and must file and submit Form 1095-C for each full-time employee o Reports due to employees by February 1, 2016 this year and by January 31 st in subsequent years o Employers filing electronically must do so with the IRS By March 31, 2016 o Employers submitting forms in paper form must mail or ship by commercial carrier by February 28, 2016 7

8. 1095-A: The Health Insurance Marketplace Report—this is the report that the Exchange will send to the IRS disclosing who is covered by the Exchange, what plan is purchased, etc. This report will be used by the IRS to determine who is entitled to a tax credit or subsidy and whether employers should be assessed the affordability penalty 1095-B: This is the report sent by insurance companies and self-funded plans sponsored by non-ALEs to participants 1094-B: This is the report from the insurance companies and small employer self- funded plans to the IRS reporting who is covered by the insurance/plans 1095-C: This is the report from the ALE to each full-time employee that is covered by the employer’s plan, whether or not the ALE’s plan is fully-insured (self-funded plans must complete part III of Form 1095-C) 1094-C: This is the report from the ALE to the IRS disclosing who was offered coverage by the ALE’s plan, and various other information concerning coverage and price of the plan, whether or not the ALE’s plan is fully-insured 8

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12. Employer must have a valid EIN at the time of filing the Form 1095-C and 1094-C Each member of a controlled group of employers must file its own Forms Other corporate members of the controlled group are identified on the Form 1094-C 12

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14. Plan start month is optional for 2015 reporting Employer offers coverage for a month only if coverage is provided by the employer for every day in the month (if the employer terminates its plan during the month—no offer of coverage is deemed made) Only employees—or persons who were employees during the year—are reported in Part II (may use 1G for non-employees of self-funded plans) For multiple employer plans—employer marks 1H for the employee in Box 14 and 2E in Box 16 COBRA beneficiaries reported only in 1 st year for fully-insured plans Retiree coverage beneficiaries also reported in 1 st year for fully-insured plans 14

15. Box 14—Offers of Coverage o 1A-MEC offered to FT employee that is qualifying offer (offer to spouse and dependent and employee’s share of premium is equal to or less than 9.5% federal poverty level o 1B MEC with minimum value offered to employee only o 1C MEC with minimum value offer to employee + dependent (not spouse) o 1D MEC with minimum value offered to employee+ spouse o 1E MEC with minimum value offered to employee/ MEC offered to dependents and spouse o 1F MEC without minimum value offered to employee or mix of employee, spouse and dependent (skinny plan?) o 1G No offer of coverage—or the individual was not an employee o 1H Qualified offer transition relief 15

16. Box 15 o Only completed if Codes 1B, 1C, 1D, or 1E are entered o Enter amount of employee share of lowest cost monthly premium for self-only MEC with minimum value. o Enter $0 if the employee was not required to pay any portion of the premium o Pro-rate annual premium to monthly 16

17. Box 16—Code series 2—This series describes the employee’s situation if the employee was employed during some part of the year o 2A Employee not employed on any day of the calendar month (do not use if employee terminated during the month o 2B Employee not full-time and did not enroll in offered coverage; Employee was full-time but offer of coverage or coverage ended before last day of the month; or Employee was offered coverage by 1 st day of payroll period that begins in January 2015, coverage was affordable, and provided minimum value o 2C Employee enrolled in coverage offered (except if 1G was used because person was not employed during all 12 months/use 2A if employee is enrolled in COBRA coverage during the month) o 2D Employee is in limited non-assessment period (4980H) 17

18. 2E Multiple employer interim relief 2F Section 4980H Form W-2 safe harbor. Employee was FT, and was offered coverage relying on the Form W-2 safe harbor (must be used for full calendar year 2G Section 4980H federal poverty level save harbor to determine affordability, employee was FT and employee was offered coverage 2H Section 4980H affordability safe harbor based upon rate of pay, employee was FT and employee was offered coverage 2I Non-calendar year transition relief applies to the employee for the month 18

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20. To be completed ONLY if the employer offers employer- sponsored self-insured coverage in which the employee or other individual was enrolled “X” in Part III must be marked This part must be completed by an employer who offers self-insured coverage for any individual who is an employee and may be used to report any employee who is NOT an employee (use 1G in Part II, “all 12 calendar months for these folks) 20

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23. All ALEs must report All ALEs must that offer self-insured coverage must complete all parts of Form 1095-C, for all covered individuals Non-ALEs that offer self-insured coverage should report on Form 1094-B and 1095-C 23

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25. Employer must have EIN Employer’s address, etc., should match EXACTLY the information on the Form 1095-C Lines 9-16 are completed ONLY if employer is Designated Governmental Entity Line 17 –is reserved Line 18 Total number of 1095-Cs submitted Check Box if this is authoritative transmittal 25

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27. Line 20-Total number of Forms 1095-C filed for employer (used for employers who file multiple Form 1094-Cs due to different plans being in different business lines or classes of employees) Line 21- Check “Yes” if employer member of ALE Group (i.e., member of controlled or affiliated service group) Line 22-Reporting of use of offer method/reliance upon transition relief 27

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29. Column (a) is used to designate whether MEC was offered to 95% of full time employees o “x” should be entered if employer is eligible for transition relief o Column (e) is used to designate transition relief types o “A” for 50-99 employees o “B” for 100 or more transition relief Column (b) is used for FT employees count (not including those in Limited Non-Assessment Period)—no entry necessary if employer eligible for 98% offer method. 29

30. Column (c) for total employee count—including full-time, not full-time and employees in Limited Non-assessment Period. o Employer must choose date of the month for monthly count o Use “all 12 months” designation if employee head count did not change during the year Column (d) to indicate member of Aggregated Group (then go to Part IV) 30

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32. Identify up to 30 other ALE members of Aggregated ALE group If more than 30 exist—list the members who have the most employees first—highest to lowest If any member uses 98% offer method, ALL ALE group members should use average number of total employees, rather than number of FT employees 32

33. Employers who are ALEs may use Form 1094-B and 1095-B for non-employee covered individuals of self-insured plans Employer may receive 30-day extension by completing Form 8809— this MUST by the due date Upon a showing of hardship an additional 30-day extension may be granted Waivers of the obligation to file electronically may be obtained by filing Form 8508 (penalty up to $250 per return may be imposed if Forms are not filed electronically and no waiver was obtained) 33

34. $250 per return for failure to file up to $3 million $250 per return for failure to provide correct payee statement up to $3 million Intentional disregard penalties do not have a cap--$500 per return IRS may waive penalties for 2015 if “good faith efforts to comply” were made 34

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