ACA IRS INFORMATION REPORTING: WHAT DO I NEED TO KNOW?

CPAs & ADVISORS

ACA – IRS INFORMATION REPORTING: WHAT DO I

NEED TO KNOW?

TO RECEIVE CPE CREDIT

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Robert Conner, CPA

National Tax Assistant Director

rwconner@bkd.com

Jim Ashley, CPA

Senior Manager jashley@bkd.com

AGENDA

Purpose of reporting requirement

Applicable forms & when they are due

Penalties for noncompliance

Information needed to complete forms

What I should be doing now to prepare

BKD’s solution to ACA information reporting

PURPOSE OF REPORTING REQUIREMENT

ACA’s #1 goal is for all individuals to have access to

affordable health coverage

Government is using a stick vs. carrot approach

to ensure compliance

PURPOSE OF REPORTING REQUIREMENT

Individual mandate

 All individuals, unless exempt, are required to maintain Minimum Essential Coverage (MEC) or pay a penalty  Reporting is necessary to determine whether individuals

PURPOSE OF REPORTING REQUIREMENT

Employer mandate

 Applicable Large Employers (ALEs) are required to provide affordable MEC to full-time employees or risk penalty if a full-time employee receives a premium tax credit or cost share subsidy

 Reporting is required for all large employers (those with 50+ full-time employees & equivalents) regardless of coverage offering

 Reporting is necessary for the IRS to determine

• If employer has complied with mandate

• If an employee is eligible for a premium tax credit or cost share subsidy

PURPOSE OF REPORTING REQUIREMENT

New tax forms help IRS

monitor compliance &

assess penalties when

applicable

 1095-A

 1094-B/1095-B  1094-C/1095-C

2015 FORMS 1095-A, 1095-B & 1095-C

HOW IS A 50 EMPLOYEE THRESHOLD MEASURED?

Threshold is determined based on previous year

employment numbers

 i.e., If employer has fewer than 50 full-time employees, including full-time equivalent employees, on average during the prior year, employer does not have a 1095-C reporting requirement (1094-B/1095-B may apply if self-insured)

HOW IS A 50 EMPLOYEE THRESHOLD MEASURED?

Controlled groups are treated as one employer (e.g.,

parent-subsidiary controlled groups, brother-sister

controlled groups & combined groups)

Affiliated service groups & management company

arrangements are also treated as one employer

If combined number of full-time employees &

equivalents for group is 50+, each employer in the

group is subject to combined information reporting

requirements

HOW IS A 50 EMPLOYEE THRESHOLD MEASURED?

What if employer was not in existence during

preceding calendar year?

 Determination is based on average number of full-time employees & equivalents reasonably expected to be employed on business days in current calendar year

WHO IS A FULL-TIME EMPLOYEE?

A full-time employee for any calendar month is an

employee who

 Has on average at least 30 hours of service per week during calendar month or

 At least 130 hours of service during calendar month

WHO IS A FULL-TIME EQUIVALENT EMPLOYEE?

Full-time equivalent employees are determined

using two steps

1. Combine number of hours of service of all non-full-time employees for month, but do not include more than 120 hours of service per employee 2. Divide total by 120

INFORMATION REPORTING RULES FOR 1095-B & C

Due dates for 2015 forms

 Forms must be sent to recipients by January 31, 2016

• Recipients must receive hard copies of forms unless employer acquires affirmative consent for electronic submission (W-2 consent does not count)

 Forms must be transmitted to IRS by February 29, 2016, if paper filing, or March 31, 2016, if filing electronically

• IRS electronic filing is mandatory if submitting 250 or more forms • 30-day IRS filing extension is granted for paper or e-filing by

completing Form 8809

Failure or late filing of forms could subject employer

to a penalty of $250 per form

INFORMATION REQUIRED

FOR 1095-C & 1094-C

1095-C: PART II – EMPLOYEE OFFER & COVERAGE

1095-C: PART III – ONLY FOR SELF-INSURED PLAN

1094-C: PART IV – AGGREGATED ALE GROUP

If Line 21 is checked “Yes”, include the name(s) & EIN(s) of up to 30 of Aggregated ALE Group members

INFORMATION REQUIRED

FOR 1095-B & 1094-B

Complete Part I & III only. Part II is not applicable to self-insured employers

1094-B: TRANSMITTAL FOR SELF-INSURED NON-ALE

WHAT CAN I DO RIGHT NOW TO PREPARE?

Determine whether your organization will have to file based on the 50+ full-time employee & equivalent threshold

Identify & coordinate filing for controlled group relationships Learn the fundamentals & identify what forms apply to my organization

Understand data requirements

 What information will I need to collect?  Where am I going to get it?

BKD’S SOLUTION TO ACA INFORMATION REPORTING

Informational brochures for self-insured & fully insured employers In-depth information reporting playbook

ACA 1094/1095 form filing solution

 Guide you through complexities of the new reporting requirements  Help you collect data & upload your data to a processing application  Provide a secure cloud-based application that allows users to

manually modify data on the forms

 Provide validation steps prior to submission

 Print & mail recipient forms & electronically transmit forms to IRS

BKD TECHNOLOGIES ERP MODULES FOR ACA COMPLIANCE

Dynamics – GP & SAGE HRMS software users

 Additional modules must be added & configured correctly to track employee status, offering of coverage & process 1095/1094 forms with IRS

 BKD Technologies can help with software upgrade & verify system is configured correctly

 For assistance contact

• Tim Beranek, Partner

Sage Software & Intacct leader 314.802.0291

tberanek@bkd.com

• Scott Brouillette, Principal Dynamics GP & CRM leader 816.701.0223

QUESTIONS

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CPE CREDIT

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For questions or comments regarding CPE credit, please email BKD Learning & Development Department at LandD@bkd.com

THANK YOU

FOR MORE INFORMATION// For a complete list of our offices and subsidiaries, visit bkd.com or contact: Robert W. Conner, CPA // National Tax Assistant Director