02 December 2015 / Blog
A Breakdown of ACA Reporting Requirements
By: Debra Fraser
Complying with reporting standards put forth in the Affordable Care Act (ACA) is vital for organizations preparing to close out the year and begin 2016. Since each organization will be responsible to report on employee hours, benefit offers and track eligibility measurement period for 2015 and forward, Infor has been working with the Internal Revenue Service guidelines to streamline reporting and make it easier for organizations to report their statistical benefit information directly to the IRS.
Infor released Phase One enhancements (CTPs) in September and must be applied first before Phase Two enhancements (due in December) are applied to your system. Phase Two CTPs and updates will include additional enhancements and fixes to your programs, including Cobra and Retiree enhancements.
Three components strategic to ACA application enhancements were delivered by Infor (CTPs) in Phase One. They are:
- Hours: The hours an employee works in a work week, as designated by organization and guidelines to qualify for a benefit offer (coverage) from an employer
- Offers: Represent benefit coverage extended to an employee based on an employee working at least 30 hours in a week
- Measurement period: A standard measurement period is a designated period used to determine whether an ongoing (rather than newly hired) variable or seasonal employee is full-time and eligible for health care coverage.
Organizations following the ACA guidelines are required to report 2015 benefit offers (enrollments) and hours to employees by February 1, 2016 and the IRS, by March 31, 2016. This means an organization will be reporting on benefit offers (enrollments) and hours already captured in your system.
ACA Reporting is required for organizations considered to be an applicable large employer (ALE) or an employer with more than 50 full time employees to qualify and comply with these guidelines. The ACA reporting forms differ depending on the benefit plan type. Click here for more for detail and further explanation.
- Self-funded plans report on form 1095-C and will complete parts I, II and III to comply with sections 6056 and 6055
- Insured plans report on 1095-C or 1094-c and will complete only parts I and II for section 6056
Eligible criteria for Benefit Offers
To be eligible for an ACA benefit offer, an employee must work at least 30 benefit hours week and/or 130 hours a month. This criteria is used if an organization qualifies for ALE status to determine if an employee will receive a benefit offer. Benefit offers should be setup and tracked in your system of record for historical and reporting purposes.
Enhancements to your system to meet ACA reporting requirements
Enhancements have been developed to assist in the management and reporting of the employee hours and benefit offers. The enhancements are as follows:
- Allow an organization to automatically or manually capture ACA benefit hours
- Allow employers to identify the Measure assessment period to determine whether an employee is ACA benefit eligible using hours as measurement
- Initial measurement for New Hire and Rehires as well as a standard measurement period that is used for hours
- Automatically capture benefit offers made through enrollments
- Provide year-end ACA reporting for both employee and employer reporting
Additional employee reporting forms will be available for ACA end of year reporting. Employees receiving benefit offers will receive a copy of 1095-C at the same time they receive their W2.
The 1095-C reports can be printed, mailed or delivered electronically, with employees’ consent. These reports are due to employees by February 1st, 2016
Employers must apply for a TCC Code to comply with ACA reporting requirements and to be able to send the reporting file electronically.
Employers will now be required directly to the IRS electronically using the forms 1094-C or 1095-C, depending on organizational plan status type. Employers must file reports by either February 28th, 2016, for paper forms or March 31, 2016, for electronic forms.
Begin 2015 data collection and measurement preparation
Phase One Infor CTP updates were generally available in early September. These initial updates should be applied to a development system for configuration and initial testing. These updates must be in place before Phase Two updates (due out in December) can be applied to the system. After the updates have been applied and tested, it’s recommended the programs should be run to ‘catch up’ offers and enrollments for the 2015 benefit year. After testing is verified, you must update your Production system with the same updates and configuration.
The ACA Eligibility record and benefit offers, which occur from January through December of 2015, are required to be reported. As mentioned, for 2015 you will have to report statistical information. To comply for 2015, create enrollments using the ‘catch up’ programs. The manual ‘catch up’ programs required to run will create enrollments and report benefit offers for the current year, 2015.
After creation of the records, it will be necessary to verify all enrollments, which include both enrollments and waive records. This process of verification will minimize the work needed for 2015 year-end.
To track and record 2016 Enrollments, apply the Infor Phase Two ACA CTP enhancements delivered shortly after the year end programs are available. These updates and enhancements will complete the new configuration to meet guidelines and ACA reporting requirements for offers and enrollments , which will automatically be tracked going forward.
Remember, if all the CTP updates are not installed before open enrollment, the ‘catch up’ programs should be basically run manually twice. Once for 2015, to close out the year and a second time for the ‘catch up’ programs to begin the automatic tracking for 2016.
In summary, being proactive and thorough will save you time and efficiency. Let the system do the ‘work’ for you, apply the enhancement patches, follow the necessary setup requirements and test. The process will net you dividends.