Ken_BenefitScape

I am new to the issue of Cross Testing, but started my career in Pensions (Entry Age Normal..anyone?) and am now using this concept for my own SEP Plan. Can anypne point me to the latest Excel in the public domain, I can use to sort out the EBAR for a situation where there is a 401K and a SEP? Thanks in advance Ken.phillips@benefitscape.com

I am new to the issue of Cross Testing, but started my career in Pensions (Entry Age Normal..anyone?) and am now using this concept for my own SEP Plan. Can anypne point me to the latest Excel I can use to sort out the EBAR for a situation where there is a 401K and a SEP? Thanks in advance Ken.phillips@benefitscape.com

Fantastic Summary. Thank you Brian

Pardon my ignorance? Is it true that Lines 10e and 8f MUST match. I agree the approach is dodgey but like all scams does it have some truth? Ken

Small $ when using Calculator...de minimis..

There seems to be some confusion about whether the Carrier pays bthe PCORI or the employer (sponsor)? I believe its the sponsor's responsibility. Comments?

Can a 2019 Contribution be made to a SEP that has not yet been esablished? We intend to set up a plan for an employee before July 15, 2020 and make a contribution. Can we postpone to OCT 2020 if we elect an extension? Comments? Thnak you! Ken Phillips

Hi Larry, it looks like we're neighbors. I am in Natick Mass. As an ACA e-filer we have developed software to e-file to the IRS AIR system using the application to applicatione channel. So essentially we consume data from our database and conform it to the XML schema required. From looking at Efast requirements, it seems that this is the same process, while the data is different, what I was considering was building something out to perform this task. On the other hand I realize there are software vendors that have a front end that may be easier to use than one we would develop. I see you in a qualified plan area and my interest is primarily health and welfare. I don't suspect we'll get involved with qualified plan activity although that was my background. What I was hoping to get was folks who use vendor software to tell me what they like didn't like and possibly recommend.

Bill P., RBJ and Larry.. Thank you for the thoughtful replies. My firm is a software company that specializes in ACA compliance activity and other employee benefit topics. We are also an authorized e-filer and transmitter of the ACA data to the IRS air system.We also partner with a number of HCM companies to assist in their BenAdmin effort. As the founder of a company called WorkScape I'm intimately familiar with health and welfare admin. We are looking to expand our services to offer 5500 filing of the health and welfare area and I was questioning whether we handle it like we do ACA filing or two would look for a software SAAS provider to partner with. Any comments are always appreciated

I am trying to get a handle on whether to use the DOL EFAST2 web-based filing system in its native format or use one of the many integrations available on their website. I would like to hear from any BenAdmin familiar users to see which products they prefer. Our staff is very knowledgeable in the employee benefit and ERISA arena but I would like them to have access to a tool that could facilitate and guide their work. Any comments are appreciated.

Our legal group has sent me a few drafts of their ICHRA document and I wanted to know if anyone has a template that I can use to compare the content to to be sure we've covered all of the various topics. Does anyone have a template or access to plan document? Thank you for any assistance you may provide

Thank You very much, Luke. A clear concise treatment. The one area that several practitioners argue about is as follows: Is there any set of circumstances where the below employee can get a PTC?: an employee receives an affordable ICHRA offer, (calculated by employer using the safe harbors) Waives the affordable offer Employee goes on Marketplace and recives a PTC?

(APOLOGIES FOR LONG POST) In discussions with several practitioners a question comes up as to whether an offer of an “affordable” ICHRA to an employee is a permanent barrier to the employee receiving a premium tax credit (PTC)? Most material indicates that the mere offer, even if rejected, dictates that the employee is ineligible for a PTC. Some practitioners have held a broader interpretation of this prohibition, that when an affordable offer has been made) using one of the three safe harbors. These experts hold that protection from the A and B ACA penalties is one thing using the safe harbors and that whether an employee can receive a PTC is another matter depending on their household income. In other words, offering affordable plan first rule is that employee is "initially ineligible" for a PTC. This initial eligibility is overruled when employee goes to a marketplace and based on their family income is eligible to receive a PTC. The 3 safe harbors only apply to A/B penalty is a separate issue. Comments??? Internal Revenue Bulletin: 2019-42 October 15, 2019 HIGHLIGHTS OF THIS ISSUE https://www.irs.gov/irb/2019-42_IRB#REG-136401-18 For clarity, the notice confirmed that an individual coverage HRA is an eligible employer-sponsored plan, and, therefore, an offer of an individual coverage HRA constitutes an offer of an eligible employer-sponsored plan for purposes of section 4980H(a). Consequently, if an ALE offers an individual coverage HRA to at least 95 percent of its full-time employees (and their dependents), the ALE will not be liable for an employer shared responsibility payment under section 4980H(a) for the month, regardless of whether any full-time employee is allowed the PTC. The HHI safe harbors are optional and apply only for purposes of section 4980H(b). An ALE may choose to use one or more of the HHI safe harbors for all of its employees or for any reasonable category of employees, provided it does so on a uniform and consistent basis for all employees in a category. In addition, an ALE may use an HHI safe harbor only if the ALE offers its full-time employees and their dependents eligible employer-sponsored coverage that provides MV with respect to the self-only coverage offered to the employee. If, in applying one of the HHI safe harbors the offer of coverage is considered affordable, then the employer will not be subject to an employer shared responsibility payment under section 4980H(b) with respect to that employee, even if the employee is allowed the PTC. 2. Section 4980H Affordability Safe Harbors Regarding Household Income Whether an employee may claim the PTC depends on the rules under section 36B, including the rules for whether an offer of coverage by the employer is affordable and provides MV.25 However, the regulations under section 4980H provide certain safe harbors for determining whether an ALE is treated as making an offer of coverage that is affordable for purposes of section 4980H. More specifically, as noted earlier in this preamble, whether an offer of an eligible employer-sponsored plan is affordable, both for purposes of section 36B and section 4980H, depends in part on the employee’s household income. Because an employer generally does not know an employee’s household income, §54.4980H-5(e) provides that, for purposes of section 4980H(b), an employer may substitute for an employee’s household income an amount based on the employee’s wages from the Form W-2, “Wage and Tax Statement,” the employee’s rate of pay, or the federal poverty line, using the household income safe harbors (the HHI safe harbors).26 Footnote 26" 26 Whether or not an employee has been offered affordable coverage for purposes of eligibility for the PTC is determined under section 36B(c)(2)(C)(i) and the regulations thereunder (as opposed to the section 4980H safe harbors).

As with all these matters, they become fact intensive and I don't believe that anyone other than the IRS can speak to the likelihood of 6721 penalties. It seems a prudent approach would be to file completely as soon as possible and rely on the possibility of penalty waiver. 26 U.S. Code § 6724 - Waiver; definitions and special rules, has a "(a)Reasonable cause waiver" that indicates "No penalty shall be imposed under this part with respect to any failure if it is shown that such failure is due to reasonable cause and not to willful neglect." In addition to the first steps of responding to the 5699 letter and asking for more time to prepare response, preparations for tax year 2018 should be well underway and the upcoming deadlines should be carefully observed. Being current is a good first step in preparing a reasonable response. Secondly, the approach we at BenefitScape have taken is to mount a detailed effort to to file the delinquent returns with the IRS and prepare an analysis of why the initial report was not filed, such as reliance on an administrator or insurance carrier plan was fully insured to the installation of new software that did not provide this functionality, a new health plan was setup, a change in personnel etc. would be a good first step in establishing a failure due to a "reasonable cause." From there we all hope that fortune favors the well-prepared!

Many employers are not aware that printing and distributing 1095C & 1095B forms satisfies only part of their ACA employer shared responsibility. Now they must produce the various documents for IRS filing. The IRS has a totally new information system for this purpose. It is called the Affordable Care Act Information Returns (AIR) Program and it is the only way to file for employers submitting over 250 Form 1095’s. While the IRS has tried to make the process of filing these ACA forms straightforward, it is a new complex and technical undertaking. To complete your filing with the IRS you must prepare a Form 1094C which contains information about your organization and the percentage of full-time employees and their dependents that were offered coverage. You also need to prepare a special document called a manifest and collect all of the electronic versions of 1095C forms. Since providing ACA efiling is my sole focus I have put together some 'Insights for the Adventurous" and would be pleased to share my experiences with the AIR Program. Attached is a document that outlines what to expect..Comments and suggestions are welcome. ACA Efiling Insights ver 1.0.pdf