New Restrictions on Employer-Provided Medical Expense Reimbursement Plans

The IRS issued Notice 2013-54 on September 13, 2013, eliminating the opportunity for employers to reimburse most medical costs in all but limited circumstances. The change is effective for plan years beginning on or after January 1, 2014. The notice eliminates an employer’s ability to use a stand-alone medical reimbursement plan, health reimbursement arrangement (HRA), or other tax-favored arrangements, such as a cafeteria plan, to help employees pay for individual health insurance policies or other out-of-pocket medical costs.


“The notice does this by pointing out that these arrangements would fail to satisfy the Affordable Care Act’s (ACA) market reform provisions requiring no dollar limits on essential health benefits and no-cost preventive health services,” says Andy Biebl, a tax principal at CliftonLarsonAllen.
For example, the market reforms prohibit any limit on certain essential health benefits. But stand-alone Section 105 plans limit the amount for which an employee may seek reimbursement. The sanction for violating these rules is a punitive $100-per-day, per-employee penalty, or $36,500 per participant per year — effectively a total prohibition.

10 ways to inspire creativity in your staff.

Fostering creative business practices isn't as hard as it seems and can lead to smart solutions. Use these ten techniques to help inspire and encourage creativity in your staff. Read the article and learn 10 ways to get the creative juices flowing.

Insure Your Part-Time Workers at No Cost

	Part-time and variable-hour employees are more likely to lack employer-provided benefits than other workers. Voluntary benefits let employers provide benefits to these workers at no cost. In October 2014, more than 7 million U.S. workers worked part-time due to “financial reasons.” Although they’d prefer to work full-time, these individuals work only part-time due to slack business conditions or the inability to find a full-time job. Although these figures represent an improvement of 10 percent over 2013’s figures, reluctant part-timers still comprise a significant portion of the U.S. workforce. Unfortunately for part-timers, employers are much less likely to provide benefits to part-timers. This leaves many young and underemployed workers with no access to affordable life, health and other benefits. According to Bureau of Labor Statistics figures, a significant gap exists between the benefits part-time workers in private industry have access to* versus their full-time peers: Medical insurance: Among full-time private industry workers, 86 percent had access to employer-provided medical insurance in 2014. By contrast, only 23 percent of part-time workers had medical care benefits available. The Affordable Care Act (ACA) requires employers with 50 or more full-time equivalent (FTE) employees to provide affordable health insurance to FTE employees or pay a penalty. ACA defines full-time workers as those who work an average of 30 or more hours per week, so many workers formerly considered part-time now have access to employer-paid medical insurance. Retirement benefits: These follow a similar pattern to medical care benefits. In private industry, 74 percent of full-time workers had access to a retirement plan, significantly higher than the 37 percent of part-time workers who had access. Life insurance: Seventy-two percent of full-time workers had access to life insurance benefits. In contrast, only 13 percent of part-time workers in private industry had access. Dental insurance: Among full-time workers, 56 percent had access to dental insurance, versus 13 percent of part-time workers. Vision insurance: Thirty percent of full-time workers had vision benefits; 7 percent of part-timers did. Short-term disability coverage: Forty-nine percent of full-time private industry workers had access to this benefit; 15 percent of part-timers had it. Long-term disability: Among full-time workers, 44 percent had coverage versus 5 percent of part-time workers. Long-term care insurance: Twenty percent of full-timers had long-term care benefits; only 7 percent of part-timers did. What Are Voluntary Benefits? Under a voluntary benefit program, the employer offers employees a menu of benefits; employees pay for the ones they want through payroll deduction. The employee pays the cost and the benefits provider handles all administration and provides all needed education materials. With a voluntary benefits program, part-time workers can have access to the benefits they might lack otherwise. Voluntary medical plans, such as cancer insurance, have no minimum participation requirements, unlike employer-sponsored medical coverage. And with a voluntary plan, employees whose health might disqualify them from individual coverage can often get at least minimal coverage. The most popular voluntary benefits include: Life insurance. Options include term life insurance, interest-sensitive whole life (variable life) and dependent life coverages. Dental insurance. Vision insurance. Supplemental health coverages, including cancer/specified disease insurance, critical care insurance and hospital indemnity plans, which pay specified flat amounts. Long-term care insurance. Short-term disability insurance. Long-term disability insurance. Accidental death and dismemberment insurance. Group auto and homeowners insurance. Nontraditional benefits, such as prepaid legal services, pet insurance and more. Advantages of Voluntary Benefits Results from the MetLife 2014 Study of Employee Benefit Trends indicate that voluntary benefits should play an important role in any employer’s benefit program. Between 2012 and 2013, the percentage of employees who strongly agreed with the statement, “I am looking to my employer for more help in achieving financial security through employee benefits” increased dramatically, from 29 to 40 percent. Employees are also willing to pay for their benefits. Sixty percent said they’d be willing to bear more of the cost of benefits to have a choice that met their needs. A whopping 80 percent strongly agreed with the statement, “I would value more personalized benefits geared to my individual circumstances and age.” Why should employers care about these emerging employee preferences? Research indicates that benefits are a strong driver of employee loyalty. The MetLife researchers found that “…employees who are very satisfied with their benefits are more likely to feel loyal to their company and to believe their company is loyal to them.” And 65 percent of employees surveyed strongly agreed with the statement, “Having benefits customized to meet my needs would increase my loyalty.” Voluntary benefits let employees do just that. For information on what voluntary benefits can do for your organization, please contact us.  info@amsinsure.com 800-334-7875

Coming January 1, 2015: The Employer Mandate and Health Coverage

Reporting Requirements

Two requirements of health care reform that affect employers will be going into effect on January 1, 2015. First, after much debate and delay, the first phase of the Employer Mandate (or “Play or Pay” Provision) will begin. Once it is fully implemented, this provision of the Affordable Care Act will require all employers with 50 or more full time equivalent (FTE) employees to offer a certain level of health insurance coverage at an affordable rate to all full-time employees or face a possible penalty.

For 2015, only non-compliant large employers (those with 100 or more FTE employees) will face penalties. Midsized employers (those with 50-99 FTE employees) will have an additional year of reprieve (until 2016) so long as the organization did not (1) reduce its workforce or workers’ hours to get below the 99 employee threshold without a bona fide reason or (2) materially reduce its health care plan as it existed on February 9, 2014. Employer Mandate penalties are incurred on a monthly basis, but paid annually.

With the implementation of the Employer Mandate comes new IRS reporting requirements. Employers with 50 or more FTE employees must begin Section 6056 (Employer Mandate) reporting for the 2015 tax year. These forms will be filed with the IRS and provided to employees in early 2016. Although the actual reporting will not be performed until early 2016, some of the data included in the reporting must be classified by month. So now is the time to begin tracking this data. The IRS draft samples for both required reporting forms (1094-C and 1095-C) are available in your HR Support Center.

The 2015 plan limits and standard mileage rates are shown below.

2015 IRS Plan Limits Plan Year 2015 2014 2013 Health FSA Maximum Annual Salary Reduction 1$2,550 1$2,500 1$2,500 Standard Mileage Rate for Travel to Obtain Medical Care $0.23 $0.235 $0.24 Dependent Care Assistance Program (Unless Married Filing Separately) 2$5,000 2$5,000 2$5,000 Dependent Care Assistance Program (If Married Filing Separately) 2$2,500 2$2,500 2$2,500 Transit Passes and Vanpooling (Combined) Monthly Maximum $130 3$130 3$245 Parking Monthly Maximum $250 $250 $245 Highly Compensated Employee — Section 414(q) (Officer Group) $120,000 $115,000 $115,000 Key Employee — Section 416(i) $170,000 $170,000 $165,000 HSA Maximum Annual Contribution Limit (Self-only) 4$3,350 4$3,300 4$3,250 HSA Maximum Annual Contribution Limit (Family) 4$6,650 4$6,550 4$6,450 HSA Catch-up Contribution Limit $1,000 $1,000 $1,000 HDHP Minimum Annual Deductible (Self-only) $1,300 $1,250 $1,250 HDHP Minimum Annual Deductible (Family) $2,600 $2,500 $2,500 HDHP Maximum Out-of-pocket (Self-only) $6,450 $6,350 $6,250 HDHP Maximum Out-of-pocket (Family) $12,900 $12,700 $12,500 1As a result of the Affordable Care Act (ACA), health flexible spending account (FSA) salary reductions are limited for taxable years beginning on or after January 1, 2013 (the maximum limit may be indexed for inflation each year). 2Under Code Sections 129 and 21, the deemed income of a spouse who is incapable of self-care or a full-time student is $250 per month for one qualifying individual or $500 per month for two or more qualifying individuals. 3The American Taxpayer Relief Act (ATRA) made a retroactive change to the monthly pre-tax limit for eligible transit expenses incurred in 2012, and on January 1, 2013, the 2012 limit increased from $125 to $240 per month. That amount was indexed for inflation in 2013. On January 1, 2014, the expiration of the temporary increase under the ATRA caused the reduced amount. 4An employee is treated as being eligible for the entire calendar year as long as he or she is eligible during the last month of the calendar year. However, failure to maintain eligibility during the "testing period" will result in adverse tax consequences (including an additional excise tax). The testing period begins in December of the year in which the employee becomes eligible and ends the last day of December of the following year.

Employer health plan deductibles see big jump

By Kathryn Mayer

November 1, 2014 •  Benefits Selling              

Average annual premiums for employer-sponsored family health coverage are up a modest 3 percent this year, but deductibles are another story.
According to analysis from the Kaiser Family Foundation and the Health Research & Educational Trust, deductibles are up nearly 50 percent since 2009.
Since 2009, the average deductible has increased 47 percent to $1,217 as employers aim to save on health care costs, researchers said. That's compared to $826 in 2009.
This year, 41 percent of all covered workers face an annual deductible of at least $1,000, including 18 percent who face a deductible of at least $2,000. And covered workers at small firms (three to 199 employees) are even more likely to face large deductibles, with 61 percent facing at least $1,000 deductibles and a third (34 percent) facing $2,000 deductibles or higher.
“The deductibles for workers have crept higher over time, topping $1,200 on average this year,” said study lead author Gary Claxton. “Today, four in 10 covered workers face at least a $1,000 deductible, nearly double the share from just five years ago.”
Meanwhile, the main headline from the report is that average annual premiums for employer-sponsored family health coverage increased 3 percent this year, reaching $16,834, continuing a “recent trend of modest increases,” analysts said.
Workers on average pay $4,823 annually toward the cost of family coverage this year, the survey of more than 3,000 firms concluded.
Kaiser analysts called the premium growth good news for employees and employers, pointing out that premiums increased more slowly over the past five years than the preceding five years (26 percent vs. 34 percent) and well below the annual double-digit increases recorded in the late 1990s and early 2000s.
“The relatively slow growth in premiums this year is good news for employers and workers, though many workers now pay more when they get sick as deductibles continue to rise and skin-in-the-game insurance gradually becomes the norm,” Kaiser Family Foundation President and CEO Drew Altman said.
Additionally, the survey also found that nearly all employers with 100 or more workers (94 percent) already offer health benefits, shedding some light on trends on the employer market before PPACA's employer mandate takes effect.

IRS Releases New 2015 Limit for Health FSAs

The IRS and Social Security Administration released Rev. Proc. 2014-61, which announced the 2015 cost-of-living (COLA) adjustments that apply to health flexible spending accounts (FSAs). The new annual limit for health FSAs, including general-purpose and limited-purpose health FSAs, is $2,550 for plan years starting on or after January 1, 2015.
The $2,550 limit is prorated for short plan years (plan years that are shorter than 12 months), and any carryover amount from participants’ previous plan years may be added to the limit. The $500 carryover does not count against or affect the $2,550 salary reduction limit.
	Example: Participants may elect $2,550 for the 2015 plan year and carry over a maximum of $500 from the previous plan year, making their total account value $3,050 for the 2015 plan year.
Employers may also make non-elective contributions to participants’ accounts. Special rules apply to employer contributions, so please contact your CONEXIS representative if you have questions concerning employer non-elective contributions.

Proposition 45, a view

Proposition 45's authors wrote Proposition 103, which regulates property and casualty insurance. They claim they want to regulate health insurance the same way that California regulates property and casualty insurance. Because we are in the industry, we know there are significant differences between purchasing health insurance and property/casualty insurance.

WATCH VIDEO

Calif. Mandates Paid Sick Leave for Employees Beginning July 2015

     October 14, 2014

Pursuant to the recently enacted Healthy Workplaces, Healthy Families Act of 2014, employers will be required to provide paid sick leave to California employees effective beginning July 1, 2015. This new law will affect all employers, regardless of size, who have employees working in California.
Paid Sick Time Scope
The new California paid sick time accrual may be used by covered employees for:

• “Diagnosis, care or treatment of an existing health condition of, or preventive care for, an employee or an employee’s family member,” or
• Leave needed if a victim of domestic violence, sexual assault or stalking.

Under the new California Labor Code §§ 245, et seq., an employee who, on or after July 1, 2015, works in California 30 or more days within a year from the commencement of employment is entitled to paid sick days, which must accrue at a rate of no less than one (1) hour for every 30 hours worked. By including any employee working 30 or more days in a year, the law appears to apply to full-time, part-time and even temporary or seasonal workers that otherwise meet this standard. However, an employee is not entitled to use his or her accrued paid sick days until the 90^th day of employment.
Carryover and Use
The new law requires that accrued paid sick leave carry over to the following year of employment (i.e., employers are not allowed to institute a “use it or lose it” policy with respect to such paid time). However, with respect to the use of accrued time (whether regularly accrued or carried over), employers:

• May limit an employee’s use of paid sick days to 24 hours or three (3) days in each year of employment.
• May limit an employee’s total accrual of paid sick leave to 48 hours or six (6) days.
• Are not required to provide compensation to an employee for accrued, unused paid sick days upon the employee’s separation from employment (unlike accrued paid vacation under California law).

Recordkeeping, Posting and Notice
The new law establishes additional recordkeeping, posting and notice requirements. Employers will have to keep at least three years of records documenting the hours worked and paid sick days accrued and used by an employee. Employers also will be required to post notice about sick pay. Finally, an amendment to Labor Code § 2810.5 will require employers to provide employees with written notice upon hire about an employee’s rights with regard to sick pay in California.
Integration with Existing Policies
Employers who already have a paid leave or paid time-off policy are not required to provide additional paid sick days, so long as the employer makes available an amount of leave that may be used for the same purposes and under the same conditions as set forth under the new law. However, even employers with existing paid time-off policies will have to comply with the new notice and recordkeeping obligations discussed above.
All employers covered by this new California law also will need to integrate the new law with their current policies, including those related to Labor Code § 233 (“kin care leave”), family medical leave, and all other protected leaves that California provides employees. For example, established paid sick leave policies that meet the requirements of Labor Code § 233 may need amendment, as the new law extends an employee’s right to use paid sick leave benefits to care for a broader range of family members than Section 233 provides, including grandparents, grandchildren and siblings. The new law’s expansive definition of “family member” similarly goes beyond the definitions in place under the federal Family and Medical Leave Act (FMLA) and the California Family Rights Act (CFRA), such that employees may be entitled to paid sick leave that is not chargeable to their unpaid FMLA or CFRA entitlements in some circumstances.
Action Steps
Violation of these new statutory requirements can result in significant administrative fines, civil penalties, and awards of attorney’s fees and costs against employers. Employers with California employees should carefully review any sick leave or paid time-off policies, as well as wage statement practices, new-hire paperwork, workplace postings and recordkeeping procedures for their full- and part-time employees in the state. Employers also should consult with legal counsel to ensure compliance with the nuances of the new legislation.

New California Law requires employers to provide paid leave.

New California Law Will Require Employers To Provide Employees With Paid Sick Leave

Mondaq News Alerts (registration)

Once an employee works 30 days, an employer is required to provide an ... policy (or paid time off policy) provides the same benefits as the new law (i.e., it provides at least ... The new law will affect almost all employers in California.

Do you have an employee handbook, we can help you to provide one as a client at no cost: 

 http://www.amsinsure.com/hr-demo-video.php

Nearly 7M Might Enroll Outside HIX Open Enrollment

Despite open enrollment for Affordable Care Act plans not starting until November 15, a new report estimates that nearly 7 million adults may be able to enroll through special enrollment periods. READ MORE » AMS ENROLLMENT AND PLANS

Medicare Open Enrollment starts November 15th

Looking for or to reconsider your Medicare Insurance options or if you’re satisfied with your current coverage, you needn’t do anything—your coverage will renew automatically. If not, Contact us for a Medicare Supplement Plan.

Now, before open enrollment begins November 15, is the time to learn more about your options.

Your Medicare Options

Medicare-eligible individuals have two options for obtaining health insurance: original Medicare or a Medicare Advantage plan.
Original Medicare, the government insurance program geared primarily for seniors, has three parts:

• Part A, hospitalization insurance. Medicare Part A helps cover inpatient care in hospitals and skilled nursing facilities. It also helps cover hospice care and some home health care. It does not cover custodial or long-term care. U.S. citizens and lawfully admitted aliens who have lived in the U.S. for a five-year period when they turn 65 automatically qualify for Part A coverage. Individuals who develop end-stage renal disease or certain other disabilities may also qualify. Most people do not pay a premium.
• Part B, medical insurance. Medicare Part B helps pay for doctors’ services and outpatient care. It covers some other medical services. These include physical and occupational therapist services and some home health care when medically necessary. For most people, the federal government pays about 75 percent of the cost of Part B coverage; enrollees pays the rest. Higher-income people (about 5 percent of beneficiaries) will pay higher premiums.
• Medicare Part D, prescription drug insurance. The Part D monthly premium varies by plan and your income—higher-income consumers may pay more. The Centers for Medicare & Medicaid Services (CMS) estimated average 2014 premiums for basic Medicare Part D plans at $31 per month. As with Part B, higher-income people will pay more.
• Medicare supplement (“Medigap”) plans. Unlike Medicare Parts A, B and D, private insurers underwrite Medigap policies. They must adhere to specific plan designs that cover a specific set of benefits. In most states, policies are identified by letters. Not all plans are available in all states.
  As the name suggests, Medicare supplement plans supplement the coverage under traditional Medicare. These policies can help pay some of the out-of-pocket costs you’ll have with original Medicare, such as copayments, coinsurance and deductibles. Some Medigap policies also cover services that original Medicare excludes, such as medical care when you travel outside the U.S. If you have original Medicare and you buy a Medigap policy, Medicare will pay its share of the Medicare-approved amount for covered health care costs. Then your Medigap policy pays its share.

Get a quote today:  ONE STOP QUOTE

Private Exchanges:

The New Business Model for Insurers and Employers

Private Exchanges: The New Business Model for Insurers and Employers examines the details of how private exchanges work, which models are most successful at gaining members, and the pros and cons for insurers of taking part in nonproprietary exchanges versus building their own. This report is filled with valuable, practical intelligence from several national private exchange experts, on topics such as:

• The business model for private exchanges and how insurers expect to prosper by operating their own proprietary exchanges or selling coverage on other marketplaces.
• How defined contribution is playing into employer decision making and the ramifications of shifting health benefits to private exchanges.
• The differences between private exchanges and traditional "slice" business.
• The opportunities and threats that private exchanges present for insurers.
• The membership tradeoff for insurers — membership gain from previously closed relationships (such as an employer with another carrier) vs. potential loss of membership in exclusive employer relationships.
• How much revenue insurers can generate with the potential move of employers from self-insured to fully insured benefit plans.

Contact to learn more on how a PRIVATE EXCHANE will enhance you benefit package.

info@amsinsure.com

This week's health care reform news:

Enrollment verifications expected to reduce Exchange numbers

The administration is sending letters to more than 300,000 people warning that health coverage purchased through an exchange could be cut off unless eligibility issues, such as immigration status, are resolved. Similar eligibility follow‐ups are expected soon for reported income.

Preparing employers for 2015 health plan enrollment growth.

By Kathleen Koster

August 8, 2014

Open enrollment rates for employer-sponsored health plans in 2014 remained flat, but advisers and their employer clients are already putting strategies in place to prepare for expected growth in 2015 enrollments. 

Despite the Affordable Care Act’s requirement that individuals seek health insurance coverage in 2014 and the fact that employers are already preparing for the health reform law’s employer shared responsibility provision, open enrollment levels for employer-sponsored health plans remained mostly unchanged from 2013, new research from Mercer shows. On average, 69.3% of employees enrolled in employer-sponsored health plans in 2014, up only slightly from 69.1% in 2013.
In 2015, researchers expect there will be at least some growth; especially since the individual mandate penalty for obtaining coverage will be higher and more employers will open their plans to newly eligible employees under the ACA shared responsibility rules.
Benefit advisers have already begun to work with employers to put strategies in place to diminish the burden of increased health care costs an enrollment surge could bring.


Managing growth in eligibility
To manage a potential uptick in employees eligible for health coverage in 2015, 10% of employers will decrease the number of employees working 30+ hours per week by next year, the Mercer survey found. Another 14% are making additional adjustments to their workforce strategies.
The survey found retail and hospitality industries, which have a higher proportion of low-wage, part-time workers, are most concerned about higher enrollment in plans. These groups are followed by the higher education sector, in which adjunct professors make up a significant portion of the faculty, yet typically are not eligible for health benefits.
What’s more, employers are concerned about becoming “dependent magnets” and attracting additional dependents and spouses, as more employees become eligible for coverage and the individual mandate penalty stiffens. About 20% of employers said they would raise the employee contribution for dependent coverage in 2014.
To further curb the number of dependents on their plans in 2015, employers are considering special provisions for employees’ spouses who have other coverage available. Currently only one-fifth of employers have such a provision in place —12% require a surcharge and 8% exclude spouses with other coverage entirely. However, this practice may gain in popularity as many employers are considering it —16% considering a surcharge and 12% considering a spousal exclusion, the survey found.

Health care reform: Know the rules and penalties of the individual mandate

May 29, 2013
The individual mandate starts in January 2014 and is an important part of the Affordable Care Act. The individual mandate requires people legally living in the U.S. to buy a minimum amount of health coverage unless they are exempt. In general, people who don’t have to file taxes due to low income are exempt from the individual mandate.
But how does it work? And what are the penalties for people who don't get coverage?
How the individual mandate works
When your clients file their 2014 taxes in 2015, they’ll need to report whether or not they had health coverage in 2014. If they did have coverage, they will need to report if they qualified for a tax credit or subsidy. Health coverage includes a group plan, an individual plan, Medicare or Medicaid. If they don’t have health coverage, they could face a tax penalty. Each year, the penalty increases.
What are the tax penalties?
If a person doesn’t have a health plan, he or she will pay a tax penalty as follows:.

• 2014: Penalty is the larger amount - $95 or 1% of taxable earnings
• 2015: Penalty is the larger amount - $325 or 2% of taxable earnings
• 2016: Penalty is the larger amount - $695 or 2.5% of taxable earnings
 

What happens if your clients can’t pay for a plan?
Your clients may qualify for a tax credit through the exchange based on their incomes. People earning between 100% and 400% of the federal poverty level can qualify if they are not eligible for other sources of minimum essential coverage, including government-sponsored programs such as Medicare and Medicaid.
This includes:

• Individuals with modified adjusted gross incomes of $11,490 to $45,960 a year
• Families of four with modified adjusted gross incomes of $23,550 to $ 94,200 a year.

Your clients may qualify for cost-sharing subsidies based on their income. This includes:

• Individuals with modified adjusted gross incomes of $11,490 to $28,725 a year.
• Families of four with modified adjusted gross incomes of $23,500 to $58,875 a year.

HR Tip of the Month

HR Tip of the Month

Family Medical Leave Act (FMLA) allows employers to require employees to substitute vacation, sick or other paid leave for all or part of the 12 weeks of unpaid FMLA leave.

Employers Consider Expanding Voluntary Benefits

Critical illness insurance, identity theft coverage and financial counseling services are among the voluntary benefits companies are considering offering to employees, a recent survey found. Critical illness and accident insurance are increasingly seen as complementary to consumer-driven health plans and have driven voluntary sales over the past year, research shows. Employee Benefit News (8/4) read more

Study Shows Members Enrolled in CDHPs Experience Lower Health Care Costs

Today, the operator of Blue Cross and Blue Shield of Texas (BCBSTX) released the results of its annual Consumer Directed Health Plan (CDHP) study. The study shows that individuals enrolled in CDHPs continue to experience lower health care costs and take advantage of more preventive health measures, long after switching from their traditional insurance plans.

In fact, the study found that after switching from a traditional plan to a CDHP, members saw a three-year average reduction in:

• Medical expenses — decreased by 11.8 percent
• Overall spending, combined medical and pharmacy costs — decreased by 10.5 percent
• Inpatient care costs — decreased by 23.5 percent
• Outpatient care costs — decreased by 5.1 percent
• Professional services costs — decreased by 14 percent

IRS Publishes Form Drafts for New ACA Employer Reporting Requirement

Please note; check with your payroll or HR provider for information.

On Thursday, July 24, 2014, the IRS published highly anticipated drafts of the forms large employers with 50 or more full-time equivalent employees will be required to use for the Code 6056 reporting requirement.  Code 6056 requires applicable large employers to file a transmittal with the IRS (Form 1094-C) and provide a new return to employees (Form 1095-C) in January 2016 for the 2015 calendar year.  This reporting requirement has a triple purpose, as it is designed to allow the IRS to enforce the employer mandate, enforce the individual mandate, and confirm eligibility for premium tax credits for coverage purchased through an Exchange.

This reporting and disclosure requirement is new for employers and may catch some employers off-guard.  For example, the reporting requires collection and disclosure of information including, but not limited to, the following:

• Social Security numbers of employees, spouses and dependents;
• Names and EINs of other employers within the employer’s controlled group of corporations for each month of the calendar year;
• Number of full-time employees for each calendar month;
• Total number of employees (full-time equivalents) for each calendar month;
• Section 4980H transition relief indicators for each calendar month;
• Employee’s share of the lowest-cost monthly premium for self-only, minimum value coverage for each calendar month; and
• Applicable Section 4980H safe harbor for each calendar month.

Please note these forms are in draft form only and are subject to change. The IRS has not yet released instructions for the forms, which should provide the detail necessary to complete some of the more ambiguous cells in the forms. The first transmittal and returns will not be filed until January 2016, but much of the information must be reported for each calendar month of 2015. Ensuring internal time and attendance systems, record management, and payroll systems are capable of producing the required information is critical. Although there is much information left to be released by the IRS concerning the Code 6056 reporting requirement, employers subject to this requirement should begin preparing now.