Where’s the Process? ACA-style
Tuesday June 30th, 2015
You remember the question from the Wendy’s commercial in the 80’s, don’t you? Where’s the beef? It has been stuck in our head for decades. Now that the deadline for the ACA IRS reporting is looming, everyone seems to be asking “Where’s the process?” It may or may not have occurred to the IRS that if they are developing guidelines to transmit and software to receive as slowly as they are, that those who have to comply with these requirements must just need as long as that to gear up processes.
Distribution of returns to covered individuals and full-time employees is quickly approaching and some things are not finalized yet: not the systems to receive the data at the IRS or even the process to handle the myriad inquiries the IRS is bound to receive. With that said, what are steps that Applicable Large Employers (ALE), insurers and third parties must take to do the groundwork to comply?
Learn about the forms
The IRS has a separate page setup to post publications, schemas and other information regarding the new information returns required for 2015. AIR is the IRS ACA Information Returns Program. Anyone required to meet these requirements should sign up for alerts from this page and participate in all AIR working groups webinars.
During one webinar, a spokeswoman from the IRS stated that anyone who is subject to these requirements must become very familiar with the forms and the instructions which require you to read them several times.
The collection of data on these forms, whether they be Forms 1094/1095-B or 1094/1095-C must have started January 1, 2015. All insurers and self-insured plan sponsors comply with Forms 1094/1095-B and all ALEs (even if self-insured) must comply with Forms 1094/1095-C.
In order to meet the 2016 reporting requirements, data collection includes:
- FEINs within a controlled group
- Total employees
- Total FT employees
- Total months covered
- Whether minimum essential coverage was offered, is affordable and meets minimum value
- Employee information including Social Security Numbers or birth dates
Those responsible for the electronic transmittal are one of three entities: software developer, transmitter or issuer. Software developers are organizations writing either origination or transmission software according to IRS specifications. Transmitters are third parties sending the electronic information return data directly to the IRS on behalf of any business required to file. Issuers are businesses filing their own ACA information returns regardless of whether they are required to file electronically or volunteer to file electronically. The term issuer includes any person required to report coverage on Form 1095-B and any ALE required to report offers of coverage on Form 1095-C and file associated transmittals on Form 1094-B or 1095-C.
The IRS states that these roles are “not mutually exclusive, for example, a firm or organization may be both a Transmitter and a Software Developer. In addition to the roles the firm or organization will perform, the application will require the transmission method for Transmitters and Issuers or the transmission method(s) the software packages will support."
Any entity distributing/submitting 250 returns or more (1095-B or 1095-C) must transmit electronically to the IRS no later than March 31, 2016. Paper returns are due by February 28 to the IRS and individual returns must be provided no later than January 31, 2016.