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  1. My understanding is that non-ALEs offering an ICHRA are supposed to file 1094-B and 1095-Bs. Other than the "because it's the law" and "there could be substantial penalties if your failure is discovered" is any real purpose served by such filings? Thanks
  2. Our client just filed their 2019 1095-Cs with the IRS. They were overlooked back in the spring (an extension to May 1 was filed) due to COVID/PPP things, and we just realized they hadn't been filed last week. No letter has been received from the IRS. Technically, a penalty of $270 per record could be charged. But do any of you know if the IRS is actually assessing the penalty when the taxpayer files them on their own, without the IRS having to get involved? Please give us some good news! And yes, the forms were distributed to the employees timely.
  3. Does participation in a state Medicaid program subject a healthcare provider (specifically, cognitive behavioral therapist) to ACA Section 1557 under the new final rule?
  4. Hi, I just need to confirmation on this event: we have an employee who is married and was covered by his parent's employer. His coverage ended on 6/30/19. He wanted to use his special enrollment period to enroll not only himself, but also his spouse (who has no qualifying loss of coverage). I told the employee he could not enroll his spouse, at this time, but am getting some push back and just wanted to make sure I am not mistaken. Thanks!
  5. I have a client ALE who has not offered coverage to any of its FTEs or FTE equivalent. Of course they have now received a 226-J letter for 2016 because 8 ees have received a PTC on the Exchange. Their argument is that they could not afford to offer coverage because 2018 is the first year they turned a profit (they took over a company in 2015 and never offered coverage). I'm just curious to know if anyone has successfully made a hardship argument on behalf of a client who has never offered coverage to their employees. Of course I am requesting W2s from the client to make sure the IRS did not mistakenly offer the PTC to these employees, but I'm afraid that they are going to get hit with penalties for the past 3 years and likely go out of business. Thank you!
  6. Does anyone have any thoughts on what the likelihood is that the IRS will assess penalties under Code Section 6721 on a hypothetical ALE that failed (for no reason other than a lack of knowledge of the requirement) to timely file with the IRS Forms 1094-B and/or 1095-C for 2016?
  7. Even when the ALE offered affordable coverage some full-time employees were able to get PTC/CSR subsidies and it's causing the IRS to propose the 4980H(b) ESRP against the ALE. So I'm curious if we "prove" to IRS that our employee was not entitled to any subsidy because we offered affordable coverage will the IRS go back against the employee to recoup the subsidies? If so the employer may decide to not fight the "b" penalty to avoid antagonizing the employee.
  8. After enactment of the ACA much has been written about the DOL 's supposed focus on investigating health plans for ACA, HIPPA and other compliance and there has been anecdotal evidence of a few investigations but is it really a DOL priority? Anybody have experience with any such investigations and if so what DOL Regional Office? Thanks
  9. Are there circumstances where the ER offers affordable, minimum value coverage but the EE can still qualify for a Marketplace subsidy (premium tax credit? Stated differently, is the definition of what's affordable for purposes of the employer mandate exactly the same as the definition used for purposes of PTC qualification? We've encountered situations where subsidies have been awarded despite our submission of proof that the employee declined an offer of coverage that met an affordability safe harbor.
  10. One of the common mistakes resulting in erroneous IRS 2015 ESRP assertions is failure to properly report eligibility for 50-99 or 100+ transition relief on the 2015 Form 1094-C. I know that box C in line 22 (Section 4980H Transition Relief) needed to be checked along with either code A or B entered in line 23 column (e). What I'm questioning is whether the Yes or No box (MEC Offer Indicator) was supposed to be checked in line 23 column (a)? Page 8 of the 2015 instructions could be interpreted either way, what are others doing? Thanks
  11. I work with a company that just received a "Dear Taxpayer" letter, purportedly from the IRS, asking them to re-submit all Form 1095-Cs because they were incomplete, or not in the required format. Has anyone else seen a letter like this? I haven't seen any chatter online and am curious about its legitimacy. This appears to be a form "1865C" (which I can't find any reference to online), and directs us to send the 1095-Cs to a particular IRS stop in Kansas City (which I've also never seen referenced online). Any thoughts? Has anyone received something similar or seen anything about this? Thanks much!
  12. I have the following two questions regarding exchange open enrollment periods and termination of an employer contribution towards a former-employee's COBRA coverage. I have also provided additional information and references to relevant information. Thanks in advance! Does termination of an employer contribution towards a former employee’s COBRA coverage create a special enrollment period to enroll in exchange coverage for the former employee? Information on the healthcare.gov website indicates that an individual may change from COBRA to a Marketplace plan outside of an open enrollment period if the individual’s COBRA costs change because his former employer stops contributing towards the COBRA coverage, and the individual is required to pay the full cost (see https://www.healthcare.gov/coverage-outside-open-enrollment/special-enrollment-period/ and https://www.healthcare.gov/unemployed/cobra-coverage/). This is inconsistent with the regulations, which provide that termination of employer contributions can create a special enrollment period “in the case of an employee or dependent who has coverage that is not COBRA continuation coverage.” 26 CFR 54.9801-6(a)(3)(ii), which is incorporated by reference into 45 C.F.R. §155.420 regarding special enrollment periods. Assuming the former employee drops the COBRA coverage once the employer contributions end and is otherwise eligible for advance payments of the premium tax credit, does termination of employer contributions towards a former employee’s COBRA coverage that results in the COBRA coverage being “unaffordable” under Code section 36B and 26 C.F.R. § 1.36B-2 create a special enrollment period to enroll in exchange coverage for the former employee because the former employee would be newly eligible for advance payments of the premium tax credit (which creates a special enrollment period pursuant to 45 C.F.R. §155.420(d)(i)(6)(iii))? REGTAP FAQ ID 1496 provides that “f they are voluntarily dropping coverage outside of Marketplace open enrollment (their COBRA has not yet expired), they would not qualify for a special enrollment period. During the next open enrollment period or when their COBRA expires, they could enroll in a QHP and may be eligible for APTC;” however, must the former employee wait until the next open enrollment period if termination of the employer contribution results in the coverage no longer being “affordable,” and therefore, would be newly eligible for advance payments of the premium tax credit because the individual is ineligible for qualifying coverage in an eligible-employer sponsored plan in accordance with 26 CFR 1.36B-2(c)(3).
  13. Company acquires sub of seller via an asset purchase transaction and decides to employ certain of the sub's employees following close of the transaction. Buyer is an ALE. There will be a lag time until Buyer gets plans in place for the acquired employees (it's putting separate plan in place for the acquired employees). Buyer is considering paying for acquired employees' COBRA under Seller's plan on a tax-free basis. Any thoughts as to whether this will work, or what issues it may raise? What about the ACA concerns? Thanks in advance.
  14. IRS has started notifying employers it suspects were Applicable Large Employers for 2015 but who have not filed 2015 Forms 1094-C and 1095-C (see redacted letter 5699 attached). I'm wondering what "records" iRS used to make this determination, perhaps the filing of a threshold number of W-2s in 2014 that might indicate ALE status for 2015? IRS Letter 5699 Request for 2015 Forms 1095-C_15342356(1).PDF
  15. As an employer, our employees are classified as Full-Time (35+ hrs per week,) Part-time (30-34hrs per week,) and per diem (less than 30/when we need them.) We charge our insurance premiums based on those classifications. The less hours you work, the more the employee share is. Due to ACA classifying everyone over 30 as full time, when calculating affordability would we need to calculate both the lowest share single coverage price for 30-34 and the lowest share single coverage price for 35+? Or is it just based on our lowest price no matter what hour category we put them in? It is the same MEC and MV plan.
  16. I am interested in others' interpretations of the IRS regulations and guidance on potential penalties for incorrect SSNs on Form 1095-C. Specifically, if an employer receives a TIN Validation Error when filing a 1095-C electronically, indicating there is a mismatch between an employee's SSN and Name in the IRS database (either a mismatch or no record), is the employer required to verify the SSN with the employee and make an attempt to correct the return, in order to demonstrate a good faith effort to comply (and thus avoid a penalty for failure to file a correct return)? Or is documentation of the initial receipt of the incorrect SSN from the employee enough to demonstrate good faith effort (i.e. a Form W-4)? Does the 2015 relief from penalties for filing incomplete or inaccurate information based on a "good faith effort" to comply mean that the regulations under 26 CFR 301.6724-1 pertaining to a waiver of penalties due to reasonable cause don't apply for 2015? Should an employer receiving a mismatch error notice thru the efile system verify the SSN with employee now, or wait until a formal penalty notice is received? I'm setting aside the myriad of immigration and discrimination issues this presents for purposes of this discussion. Any input or discussion would be greatly appreciated!!
  17. Need a 1095-C Reporting wizard... -- Code 2C, employee enrolled in coverage. Code 1E, MEC offer to Ee+spouse+kids. Have bi-weekly enrollment and eligibility for our plans. Employee eligible for coverage on 6/29/15 but didn't enroll until 7/13. Colleague suggests July reporting should be 1E/2C, because employee was offered coverage for whole month, even though no coverage effective until 7/13. I think July reporting should be 1E/2H because employee's coverage was not effective for every day of the month. 2H definitely applies. Would appreciate any thoughts, and especially a point to any IRS authority or specific example on this bit of minutia.
  18. 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
  19. The ACA requires non-grandfathered group health plans to provide the following preventive care services without cost sharing: ■ Evidenced-based items or services that have in effect a rating of “A” or “B” in the current recommendations of the United States Preventive Services Task Force (USPSTF) with respect to the individual involved; ■ Immunizations for routine use in children, adolescents, and adults that have in effect a recommendation from the Advisory Committee on Immunization Practices (ACIP) of the Centers for Disease Control and Prevention (CDC) with respect to the individual involved; ■ With respect to infants, children, and adolescents, evidence-informed preventive care and screenings provided for in the comprehensive guidelines supported by the Health Resources and Services Administration (HRSA); and ■ With respect to women, evidence-informed preventive care and screening provided for in comprehensive guidelines supported by HRSA, to the extent not already included in certain recommendations of the USPSTF I am looking for the specific primary source recommendations for each of these four categories. I have found three but cannot find any discussion of the third bullet. Can anyone provide any authority on what services need to be covered under that item? Thanks in advance. zxczxczxc
  20. Can anyone provide some guidance on how (or whether) a employer sponsor of a self-insured plan reports on Form 1095-C with respect to employees who terminated employment prior to 2015 but participated in the plan by reason of COBRA for all or a part of 2015? Are they reported the same way as employees who terminated in 2015 are reported for the portion of the year in which they were on COBRA? Thanks.
  21. A client has chosen to use 1/1/14 - 6/30/14 to determine if it is an applicable large employer for 2015. They have chosen to use this time frame because they are a farming business with more employees in the later half of the year. If they have biweekly pay, how do we count full time employees on a calendar month basis? Are you allowed to use the weekly rule, where the period measured for the month must include the week that includes the 1st day of the month or the week that includes the last day of the month but not both? So it would essentially include 2 payrolls per month? Or is the weekly rule not allowed to determine ALE status?
  22. I have been reading the ACA regs on seasonal employee (not worker) trying to make a determination as to whether an uptick in business (summer months or spring etc) which is pretty predictable and the workers hired to deal with the uptick would qualify as seasonal employees. For example, could an accounting firm hire a bunch of accountants for 80 hrs a week for 4 months over tax season. Or do UPS drivers hired for 3 months to deal with the X-mas / Holiday rush qualify for seasonal status. What about a manufacturing company who has a busy season based upon demand (people buy product X usually in spring) who hire workers for 6 months. The nature of the work isn’t seasonal (not based upon a time of year such as fruit pickers or ski instructors) however the busy season is based upon a business seasonal increase in business. Any thoughts would be appreciated. The regs aren't that helpful ...
  23. It is possible to apply an automatic escalation feature to non-ACA participants? In other words, can a sponsor automatically escalate participants that have made an affirmative deferral election? Plan sponsor wants to have an ACA (at 3%) with an escalation provision of 1% per year up to 8%, but also wants to auto-escalate participants who have elected to defer less than 8% by 1% every year till they hit 8%. Example: Participant affirmatively elects to defer 2% on July 1st, sponsor wants to auto-escalate this participant to 3% on the following January 1st. To me this is like an having a new auto-enrollment date every year for participants that have made an affirmative deferral election, however, instead of being autoenrolled at 3%, they just get increased by 1%. Part II: Does the escalation of non-ACA participants feature need to be in the plan document, or can this simply be an administrative policy and be described in the enrollment form? Our Volume Submitter document is not well suited to incorporating this feature as the only auto-escalation language is tied to the auto-enrollment feature. Part III: Must a participant be able to elect out of the auto-escalation feature? Is there a way to avoid allowing a non-ACA participant to opt out of auto-esclation? Believe me, I would never recommend this feature to a sponsor, but as you know, some sponsors are a lot smarter than the rest of us. Any insights would be appreciated.
  24. How does the Cadillac tax apply to an EGWP plan? Under the ACA, there is a 40% tax on the excess cost of health insurance. A Part D Employer Group Waiver Plan ("EGWP") provides insurance that supplements Medicare. How do the Medicare reimbursements get treated for Cadillac tax purposes? Example: Assume monthly cost of EGWP plan is $1,000 and that Medicare pays for $750 and employer/insurer pays for $250. Is the total $1,000 considered the cost of health insurance or just the $250 paid by the employer/insurer?
  25. Does anyone have any ideas as to what the proper correction would be under 4980D(f)(3) for credits made to a non-integrated HRA? It is clear from the IRS, DOL, and HHS guidance that a non-integrated HRA will fail to comply with the annual dollar limit prohibition and preventive services requirements. If a plan sponsor (in the multiemployer plan context) makes credits to an HRA account and then later finds out the individual was not enrolled in a group health plan (rendering the HRA account "non-integrated"), what could be done to correct and avoid being slapped with the $100 per day/per individual excise tax penalty? 4980D(f)(3) states that: (3) Correction A failure of a group health plan shall be treated as corrected if— (A)such failure is retroactively undone to the extent possible, and (B)the person to whom the failure relates is placed in a financial position which is as good as such person would have been in had such failure not occurred. My thoughts: 1. The sponsor could "un-credit" the amount credited to the HRA. This addresses subsection (A) regarding the retroactive "undoing" of the failure. But what about (B)? If the plan also has an FSA feature, presumably the employer could "re-credit" the amount to the FSA, which should place the individual in as good a position they would have been under the HRA (no tax recognition, can reimburse eligible medical expenses, potentially a rollover feature). And if the plan doesn't have an FSA option?... 2. The sponsor could un-credit the HRA, turn around and give that amount to the employee after-tax and gross up his or her wages. 3. The noncompliance period under 4980D(b)(2) would run from the date the individual had both credits to his or her HRA account and was not enrolled in a group health plan, and would end on the date the HRA was un-credited and the employee was made whole. 4. The sponsor could potentially take advantage of the reasonable diligence exception under 4980D©(1) if it required employees to fill out an attestation form certifying that they are enrolled in group health plan coverage. If the employee is not enrolled in the sponsor's coverage, what more should the sponsor be expected to do to exercise reasonable diligence in knowing the failure (i.e., not being enrolled in GHP coverage) exists?
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