IRS Issues Publications on Electronic Filing of Health Care Coverage Information Returns

The Patient Protection and Affordable Care Act (PPACA) implemented information reporting requirements for employers. Known as information returns, the employer supplied information allows the government to ascertain whether the employer is meeting their requirements under the PPACA. The type of information submitted pertains to the type of employer health-coverage offered, specific employee coverage, and other various requirements under the act.

In order to facilitate the information returns, the Internal Revenue Service (IRS) allows these filings to be submitted electronically. Known as the “AIR” system, the IRS issued publications to guide employers wishing to submit the PPACA information returns electronically. In order to submit the information returns, the employer must first create an account at least 28 days prior to submitting information. For some employers, such as those with over 250 of one type of information return, the returns must be submitted via the AIR system.

The AIR filings are subject to very specific instructions and requirements. To retrieve these publications, please visit the following website. http://www.irs.gov/for-Tax-Pros/Software-Developers/Information-Returns/Affordable-Care-Act-Information-Return-AIR-Program?utm_source=Mondaq&utm_medium=syndication&utm_campaign=inter-article-link

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IRS Prepares Forms and Instructions for Employer Mandate Reporting under Obamacare

Starting in 2016, all “Applicable Large Employers”–meaning those with 50 or more employees—will need to file reports with the IRS regarding whether minimum essential healthcare coverage has been made available to employees under the Patient Protection and Affordable Care Act, also known as Obamacare. The information reporting requirements will first be effective for coverage that was offered (or not offered) in 2015. The information reported will be used to determine whether an employer owes a payment under the employer mandate and for determining employee eligibility for the premium tax credit.

Employer reports will be made on IRS Forms 1094-C and 1095-C. On August 6, 2015, the Internal Revenue Service released substantially final instructions for reporting employee health coverage on those Forms. The instructions specify who must file, how to file, and what to file with the IRS.

For the first year, the IRS will not impose noncompliance penalties on employers that make good faith efforts to meet the reporting requirements. Specifically, relief from penalties for reporting incorrect or incomplete information may be provided for 2015 information included on returns and statements filed in 2016. However, penalties will still apply to employers that cannot show a good faith effort to comply or fail to timely file the required forms.

More detailed information on the Applicable Large Employer reporting requirements is available from the IRS at the following link: http://www.irs.gov/Affordable-Care-Act/Employers/Questions-and-Answers-on-Reporting-of-Offers-of-Health-Insurance-Coverage-by-Employers-Section-6056.

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Proposed Regs Clarify 90-day Waiting Period Rule Under the ACA

Under the ACA, group health plans may not impose waiting periods longer than 90 days. However, this provision raised several questions. Do employers have to offer coverage to part-time employees? Can employers require any conditions at all? In response to these issues, the IRS has issued new proposed regulations. Employers may rely on the new regulations until the end of 2014.

The new regulations have three key parts. First, the employer is in compliance as long as the employee can elect coverage within the 90 day waiting period. The employee does not actually have to elect coverage before that period expires. The second part addresses late and special enrollees. For these enrollees, the period before their enrollment does not count as a waiting period. Finally, employers can impose substantive eligibility conditions. These conditions do not violate the 90-day rule, unless they are designed to avoid compliance with the 90-day rule. So, for example, an employer can require that an employee be in an eligible job classification. Or, the employer could require that an employee achieve a certain licensure requirement.

© 2013 Parsonage Vandenack Williams LLC

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New Guidance on “Minimum Value” for Employer Health Plans

The ACA may assess penalties on certain employers if their health plans do not provide “minimum value.” Generally, minimum value means that the plan’s share of the total allowed costs of benefits must be at least 60% of the plan’s cost. The IRS has released new regulations that further explain this rule.

Under the rule, employer HSA contributions are counted as part of the plan’s share of costs. HRA contributions may also be counted under certain circumstances. But, wellness programs will not be counted, unless they are related to tobacco cessation. The rules also lay out safe harbors for plans and methods for calculating whether a plan offers minimum value.

© 2013 Parsonage Vandenack Williams LLC

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IRS Issues Proposed Regulations on Employer Shared Responsibility

The IRS has released proposed regulations explaining employer duties under the ACA. The regulations apply to employers who have more than 50 full-time employees or equivalents. Such employers may have to pay penalties if they do not offer affordable coverage to their employees.

In part, the regulations explain how the ACA affects employers. For example, they explain how to count full-time employees. The regulations provide sufficient detail that employers can begin to plan for 2014.

The IRS has established a new safe harbor for minor lapses in coverage. An employer offering affordable coverage generally will not violate the Act if it covers at least 95% of its employees. The IRS has also included rules that will make complying easier for employers who previously provided insurance for their employees. Similarly, the IRS will provide relief for employers who are close to the 50 full-time employee threshold.

Detailed information will become available at www.pvwlaw.com under Legal Articles and Information.

© 2013 Parsonage Vandenack Williams LLC

For more information, contact info@pvwlaw.com