ACA Compliance in 2016: Preparing Your Action Plan
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A panel of TEAM’s ACA experts reviewed the latest on the reporting solution, including the most recent changes in WinTeam – TEAM’s core financial, operations and workforce management solution – that will help you handle ACA reporting. They also discussed the competitive benefits of an integrated ACA solution and what you should be doing now to prepare for 2016 compliance.
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ACA Compliance in 2016: Preparing Your Action Plan
- 1. 1 © 2014 TEAM Software407 S 27 Avenue • Omaha, NE 68131 | 800.500.4499 | sales@teamsoftware.com | www.teamsoftware.com ACA: Preparing for Compliance in 2016 August 6, 2015
- 2. 2 © 2015 TEAM Software • Update on WinTeam Compliance Reporting • Preparing your action plan for 2016 and beyond • Overview of TEAM’s Integrated Solution Agenda Material in this webinar is not intended as legal, financial or tax advice. Please consult your attorney, financial or tax professional to determine the best plan for your company.
- 3. 3 © 2015 TEAM Software Housekeeping • 60 minute webinar • Q&A at intervals and end – type your questions in the GoToWebinar panel • One interactive poll during broadcast • Webinar is being recorded and will be available to you • Recap posted on TEAM’s blog
- 4. 4 © 2015 TEAM Software Panelists Dwaine Sohnholz Director of Enterprise Research Bob Kubicek Sr. Business Analyst Arianna Purcell Implementation Specialist Jason Glathar Sr. Software Developer
- 5. 5 © 2015 TEAM Software WinTeam – Integrated Solution • Insurance Benefits • Quick and efficient method of assigning Benefits • Ability to manage a variety of package combinations • Systematic, easy to use Eligibility Testing and Tracking • Audit trail when you need it most and for years to come • Simple way to manage your Payroll Deductions • Online Enrollment with Carrier Feeds (Optional) • COBRA Reporting (Optional) • 1095-C Reporting - including for the self-insured • Forms, Electronic filing and distribution to employees via eHub Web and Mobile
- 6. 6 © 2015 TEAM Software Overview • WinTeam: The 1095-C Report • Setup needed to produce the 1095-C form • Explain how the Insurance Benefit data drives to information contained on the 1095-C form • Review the ACA Safe Harbors • Discuss what is in the upcoming WinTeam August release and beyond
- 7. 7 © 2015 TEAM Software WinTeam: 1095-C Report
- 8. 8 © 2015 TEAM Software
- 9. 9 © 2015 TEAM Software Scenario Ned Newhire • Hired March 9, 2015 as a full-time employee • Eligible for coverage on May 1, 2015 • Enrolled in “bronze” level coverage that meets MEC and MV requirements • Ned’s premium is $90
- 10. 10 © 2015 TEAM Software Meets the ACA definition of Full Time In WinTeam, during 2015: • He was an active employee • He was assigned a benefit package • He passed ACA compliant eligibility testing Why is Ned getting a 1095-C?
- 11. 11 © 2015 TEAM Software Part I: Employee/ALE Info No surprises on where this data comes from • Employee Master File • Company Setup • New field for contact phone number
- 12. 12 © 2015 TEAM Software Line 14: Offer of Coverage • 1H – No offer of Coverage • 1E – MEC, MV offered to Employee, Dependents, and Spouse
- 13. 13 © 2015 TEAM Software Line 14: Code 1H No offer of coverage until his benefits package is effective on May 1.
- 14. 14 © 2015 TEAM Software Line 14: Code 1E MEC, MV ACA Setup is found in the Benefit Setup’s Pricing tab.
- 15. 15 © 2015 TEAM Software Line 14: Code 1E Offered to Spouse & Dependent Plan Option’s Relation Setup determines who a benefit is offered to.
- 16. 16 © 2015 TEAM Software Line 15: Employee Price • Blank – No offer of coverage • $90 – Employee share of the lowest-cost monthly premium
- 17. 17 © 2015 TEAM Software Line 15: Employee Price BBE
- 18. 18 © 2015 TEAM Software Line 15: Employee Price
- 19. 19 © 2015 TEAM Software • Reminder: Employees may not have enrolled in the offer of coverage and therefore wouldn’t have Payroll deductions • Or, the Employee may have enrolled in a: • Non-ACA plan • Non-Employee Only plan option (i.e. Family) Line 15: Why not Payroll deductions?
- 20. 20 © 2015 TEAM Software • Applies to our ‘Percentage Based’ cost method and W-2 Box 1 Deduction Method • Again, WinTeam doesn’t rely on deductions but does use Payroll data to calculate Federal Taxable Earnings (W-2 Box 1) per month: • Sums FTE by Paycheck Date • Factors in pre-tax ACA plan setup • Accounts for any enrolled pre-tax medical deductions Line 15: What about Percentage?
- 21. 21 © 2015 TEAM Software Line 16: Applicable Safe Harbor • 2A – Employee not employed during the month • 2D – Limited Non-Assessment Period • First month of employment • Initial Waiting Period • 2C – Enrolled in offer of MEC
- 22. 22 © 2015 TEAM Software Line 16: 2C
- 23. 23 © 2015 TEAM Software Safe Harbor Review
- 24. 24 © 2015 TEAM Software What Safe Harbor(s) are you using? 9.5% Federal Poverty Line 9.5% of W-2 Box 1 9.5% of Rate of Pay Haven’t yet determined Poll Results 14% 36% 25% 29%
- 25. 25 © 2015 TEAM Software • Reporting of covered Self-Insured • Part III: Self-Insured Covered Individuals • Eligibility Setup • ACA Compliant Benefit • Benefit Offering Setup • Multi-Employer Interim Rule • Insurance Benefits Defaults • Non-Calendar Year Transition Relief August Release: What Else?
- 26. 26 © 2015 TEAM Software • Scheduled Releases • October • December (Year End) • 1095-C Form Entry and Edit Feature • 1095-C Validation and Exception Report • IRS Electronic Submission • 1094-C Reporting • 1095-C Employer Summary Form Upcoming Releases
- 27. 27 © 2015 TEAM Software • Update Benefit Setup in WinTeam • Begin testing 1095-C Reports Checklists Available • First year, Benefit Year, Initial Online Enrollment • See Handouts pane in GoToWebinar • Click to download What you can do now
- 28. 28 © 2015 TEAM Software • Employee Information • Insurance Benefits Module • Eligibility - Determine ACA Full Time • Track ACA Compliant Benefits • Ensure Affordability • Customize Benefit Offerings • 1094-C and 1095-C Annual Reporting • Optional Services • Online Enrollment • Data Feeds to Your Insurance Carriers • COBRA Reporting • Electronic 1095-C Distribution via eHub See your TEAM Representative or email Sales@TeamSoftware.com for Optional Services Pricing How can I use WinTeam for ACA?
- 29. 29 © 2015 TEAM Software Q&A with Panel
- 30. 30 © 2015 TEAM Software • TEAM Webpage on “Health Care Reform” • www.teamsoftware.com/news-and-events/healthcare-reform.php • Government resources/links • Previous TEAM Webinars • Previous articles and links to our blog • TEAM Blog • The ABCs of ACA for Employers: 1095-C • www.teamsoftware.com/blog/ • WinTeam Online Help - Solutions Online • solutionsonline.teamsoftware.com • Specific “Affordable Care Act (ACA) Resources” topic • Flowcharts, checklists, “How To’s” Resources
- 31. 31 © 2014 TEAM Software407 S 27 Avenue • Omaha, NE 68131 | 800.500.4499 | sales@teamsoftware.com | www.teamsoftware.com Thank you for joining us! Check our blog for the link to the slides and recorded webinar.
Notas del editor
- Standard title slide
- Dwaine
- Dwaine
- Jason We want to start with a bang today by showing off our new 1095-C reporting in WinTeam While the report is new, we’ll jump in and show you how all the work you’ve been doing Insurance Benefits is driving the compliance reporting. We’ll also introduce some simple setup to help drive the reporting.
- Jason We want to start with a bang today by showing off our new 1095-C reporting in WinTeam While the report is new, we’ll jump in and show you how all the work you’ve been doing Insurance Benefits is driving the compliance reporting. We’ll also introduce some simple setup to help drive the reporting.
- Jason We’re very excited to be releasing our initial 1095-C reporting in WinTeam with the August release. Briefly New report menu option Reporting controls very similar to other reports including W-2
- Jason Ladies and gentlemen, this is a 1095-C produced out of WinTeam using the information you’ve created and maintained in WinTeam’s Insurance Benefits module. All of the codes are generated based on your Insurance Benefits data.
- Bob So we can dive in on how the 1095-C is created, let’s quickly talk about the scenario we’ll be working with today. <slide> Now let’s talk about why Ned is receiving a 1095-C.
- Ned is receiving a 1095-C because he meets the ACA definition of full time. We won’t talk much about that today, but we’ve covered in in previous webinars. <slide> Now let’s jump into Part I of the 1095-C, the Employer and Applicable Large Employer (ALE) information.
- Bob <slide> Company is the Company set on this employee’s EMF and the data comes from the Company Setup. We added a field to Company Setup for the contact information on the form. Animation: New field in Company Setup for the 1095-C contact phone number Now that we’ve got some momentum, let’s tackle the first line of month by month codes in Part II – Line 14’s Offer of Coverage.
- Bob Line 14 is meant to denote whether or not the employer made an offer of coverage to the employee for a given month. It imparts details about the type of coverage offered and who it was made to. Recall that Ned was hired on March 9th and enrolled in Coverage May 1st. <slide> If Ned would have received the same code throughout all 12 months, WinTeam would instead use the ‘All 12 Months’ box and leave the month by month boxes blank. This is true of Line 14, 15, and 16 but we won’t see it today in Ned’s example. Now let’s talk about how WinTeam calculated these codes starting with 1H.
- To understand 1H, we need to look at Ned’s Benefits by Employee screen or BBE. Ned was hired on March 9th which we see represented in his Current Effective Status date. It is also the date that he was assigned his package. Animation: Active Status and Package Effective date According to the Eligibility Setup in WinTeam, Ned was eligible for a stability start and availability date of May 1st. We can infer he was in an initial Waiting Period between March 9th and May 1st which we’ll talk about more in Line 16. Animation: May 1st Availability date for his Bronze Plan. Even though he had a package assigned and was in a waiting period he doesn’t count as offered until he can actually use his insurance. Therefore, prior to his May 1st, he receives a 1H. Next let’s talk about his offer of coverage in May and why it yielded a 1E.
- Recall, Ned was offered a “Bronze” ACA plan that met Minimum Essential Coverage and Minimum Value. That’s the first half of the definition of Line 14 Code 1E that we saw starting in May on his 1095. Up until our June release, WinTeam didn’t have any concept of whether or not a plan was ACA compliant. Since that release we’ve empowered you, and also given you the responsibility, to setup your ACA medical plans via the Benefit Setup screen Without this setup you won’t be able to create 1095-Cs. Looking at WinTeam’s Benefit Setup, we can see there is now an ‘ACA’ column in the Pricing tab. Animation: ACA column We added the ACA setup information to this tab because, similar to your pricing, it may change year to year and therefore can use the Effective Dates feature. For instance, you may work with your broker and decide you want to keep your Bronze plan for tax year 2016 but you’d like to chance your Affordability Safe Harbor to W2 Box 1. When you check the box for a given pricing, you can see the ACA benefit settings appear Animation: ACA Box appears Again, for Ned’s Bronze plan the Benefit Administrator would have checked the MEC and MV boxes to signify they meet IRS requirements. Animation x 2: MEC and MV boxes A quick note on MEC, MV, and your Safe Harbors. We highly suggest your work with your Insurance Broker, Carriers, and Legal Counsel to determine whether your medical offerings meet the ACA definitions of MEC, MV, and the various Safe Harbors. You’ll notice this is also where you’ll denote the Affordability Safe Harbor and whether or not a plan is Self-Insured. We’ll talk more about this later in the presentation. So we’ve talked about how WinTeam knows that a given ACA benefit offers MEC and MV. Let’s talk about the second part of code 1E which specifies who the plan was offered to.
- Here you can see I’ve opened a cascade of windows from the Benefit Setup’s Plan Options tab. The Plan Option Type is the starting place for how WinTeam knows who is included on the offer of coverage. As you know, WinTeam gives you the ability to name Plan Options whatever you like. We see slightly different naming among customers – probably to stay consistent with previous years or match their carriers plan descriptions. WinTeam needs to drill into each Plan Option in the Benefit to determine what types of relationships were offered regardless of how it is named. Let’s look at one PlanOption to see how that works. Animation: Employee + Family Plan Option Type For each Plan Option Type, WinTeam stores which Relationships can be included within the Plan Option. Animation x 2: Plan Option Type and Relation Within the Relation setup, the Benefits Administrator can mark whether that Relation describes a Spouse or a Dependent. Animation: Spouse and Dependent columns Looking at the Employee + Family Plan Option in Ned’s Bronze plan, we can see that it was offered to the employee as well as Relationship types of Spouse and Dependents. When we combine that with the previous MEC and MV information we can see why Ned is getting a 1095-C Line 14 code of 1E for Offer of coverage providing MEC and MV and made to dependents and spouse. Panelists: anything to add about Line 14? What if the employee’s coverage starts in the middle of the month? What if the employee has multiple ACA plans? How does WinTeam pick which one to use? Now let’s move ahead to the next Line in the 1095-C.
- Line 15 is meant to capture the Employee Share of lowest-cost monthly premium. It helps the IRS make sure that the coverage you’re offering to your employees is affordable. Here we see Ned’s Line 1095-C 15 combined with his Line 14 for context. Prior to May, when he received his offer of coverage, Line 15 is blank. A quick note, if you have employees with an offer of coverage whose cost is covered completely by the employer, you’d instead see a $0.00 in Line 15 vs. a blank. In May and beyond, we see $90. Let’s talk about where that $90 cost comes from in WinTeam as well as some other pricing topics.
- We’re back in the BBE for a quick pricing review: Pricing in WinTeam Benefits Packages are based off of the assigned Pricing Structure. In Ned’s BBE, we can his March 9th package has a ‘Standard Pricing’ structure: Animation: Pricing Structure The Pricing Structure drives the pricing defined in the Benefit Setup. Let’s look at that now.
- Now we’re back in the Benefit Structure’s Pricing Tab. We know that the Line 15 price is driven by the Employee share of price – so it makes sense that we care about the ‘Employee Only’ Plan Option. Animation: Employee Only A quick note: Just like we saw WinTeam use Plan Option relationship types to determine who the plan offered to in Line 14, WinTeam will also drill into each Benefit Plan Option to find the ones that were offered to the Employee Only and and use that pricing for Line 15. Once WinTeam determines the Employee Only Plan Option, the Standard Pricing structure in the package determines the Pricing Rule used. Animation: Pricing Rule We can see that Pricing Rule yields the $90 price seen on Line 15. I know what some of you are thinking – Ned enrolled in this plan. Why are we using the Benefit Setup’s pricing information to determine vs. his Payroll Deductions? Let’s talk more about that now.
- <slide> Now let’s talk about another hot topic dealing with employee share of cost. In Ned’s case, his Bronze plan used a Pricing Rule in WinTeam which yields a flat price per month. Many of you may have used our new Percentage Cost method and W-2 Box 1 Deduction Method.
- <slide> Panelists: Anything to add about Line 15? Again, what if my employee has multiple ACA Benefits? Which one gets used on Line 15? Excellent, Let’s talk about the last of the month by month lines in Part II – Line 16.
- Line 16 is used to denote Affordability Safe Harbors used, Enrollment in MEC plans, and several other types of relief for employers. Looking at Ned’s Line 16 we see three separate codes: <slide> Let’s jump to his BBE to understand where these codes came from.
- We already looked at the BBE for Line 14 to talk about where Code 1H came from. Again, his March 9th hire date is represented with his current Effective Status and the Date his Package was assigned. Animation: Effective Status and Package Effective Date Back on Line 14 we talked about how the hire date and waiting period didn’t change the fact that he wasn’t offered coverage until May 1 and hence yielded a 1H. But for Line 16, those dates do matter and yield a different code. Prior to his March 9th hire date he received a 2A since he was not employed any day of the month. Once he entered his initial Waiting Period in March he received code 2D for a Limited Non-Assessment period. These codes offer what the IRS would call “relief” for these months and explain why the employee wasn’t offered coverage. Once we hit May 1, when his offer of coverage happens, we can see that in his Enrollment Status he has enrolled. Animation: Enrolled Since he enrolled in the offer of coverage and it provided MEC, as seen in our Line 14 slides, he receives a code of 2C. If Ned wouldn’t have enrolled in coverage there is a good chance his Line 16 code would have told us something about the Affordability Safe Harbor used. To talk more about Affordability Safe Harbors, I’d like to hand it over to Arianna.
- Arianna
- Arianna
- Jason
- Jason
- Arianna
- Bob to populate
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