1. ACA Comply Year End Processing

2. Before you begin… The Forms populate correctly only if you have completed all of the Reporting Essentials steps. If you aren’t sure, go to Reporting Essentials > Offers of Coverage. Every employee who was eligible for benefits in 2015 should be listed. Every Outcome should be either Elected, Waived, Union, or Not Offered (for new hires still in waiting period) If you have an Outcome still listed as Offered, you MUST that record. Make sure the Dates are correct on this page! Dates are critical for reporting.

3. Year End Processing Start with the.pdf “ACA Comply Year-End Processing” guide This PowerPoint includes EXTRA information about the different questions & steps in this process.

4. Answer preliminary questions You must answer all questions on each page before reviewing your forms. 1. Validate your Measurement period setup To double-check what you’ve set up, go to the ACA Dashboard drop down, then select Setup.

5. Preliminary questions continued 2. Are your plans fully-insured by your health insurance carrier or self- insured by your organization? Unsure? Talk to your broker or visit this site.this site If you have self-insured plans, you should have already entered all dependent information on the Offers of Coverage page. Contact Helena Manzella if you have not done so.

6. Preliminary questions continued 3. Historical payroll data uploaded? If you are a PayChoice customer, your historical payroll data has been uploaded for you.

7. Preliminary questions continued 4. Did you complete the Plan Builder step? To double-check, go to Reporting Essentials > Plan Builder. Every medical plan that was offered to any employee in 2015 should be listed here.

8. Preliminary questions continued 5. Did you complete the Offers of Coverage step? To double-check, go to Reporting Essentials > Offers of Coverage. Every ‘Outcome of Offer’ should be either Waived or Elected. The Date of Offer should be the day they became eligible for the plan If the employee is still in their New Hire Waiting Period, their Outcome of Offer can be “Not Offered”

9. Preliminary questions continued 5. Is all demographic data entered? This is a 2-part question. For all clients, you can double-check your employee’s SSN & addresses under Reporting Essentials > Employees. For self-insured clients, double-check dependent’s information under Reporting Essentials > Offers of Coverage, then Export Self-Insured Template.

10. Preliminary questions continued 6. Are you ready to proceed? Then click Next Step. Downloads a word document with definitions.

11. Verify Employer Information Verify the information in the fields below. Changes can be made directly in these fields. Click Next Step to continue.

12. Verify Applicable Large Employer (ALE) status Verify the information in the fields. You can change the answers. Click Next Step to continue. This question refers to Form 1094-C, Box 22. In this case, I am going to change the first field to “Yes” because I know I have under 100 FTE’s. I understand that changing the above answer affects what is reported on the Forms. Yes = 1094-C, Part III, column (e) will populate with A. Yes = 1094-C, Part III, column (e) will populate with B.

13. Employer-Sponsored Healthcare Plan Information Verify the information in the fields below. Click Next Step to continue. These questions affect which codes populate on your employee’s 1095-C, line 14. If you are unsure, check with your broker. Is your medical plan renewal date not January 1, since 2012? Please see next slide for more information. The first 3 questions are answered on the Plan Builder step.

14. Employer-Sponsored Healthcare Plan Information: Multi-Employer Welfare Arrangements (MEWA) What is a MEWA? Multiple Employer Welfare Arrangement Employers might have a MEWA if their benefits are administered by a collective bargaining unit. Generally, if an employee gets an offer of medical coverage under a multiple employer welfare arrangement, it is treated as an offer of coverage made by an employer. IRS information can be found here.here If you are unsure if your organization is part of MEWA, you must consult with an ERISA attorney. Proxus cannot advise on this question.

15. Affordability Safe Harbor Information Verify the information in the fields below. Click Next Step to continue. These questions affect which codes populate on your employee’s 1095-C, line 16. You can answer “Yes” to any (or all) of these questions. Is the lowest cost plan under $92.39 per month? Is the lowest cost plan < 9.5% of at least one employee’s rate of pay? Is the lowest cost plan < 9.5% of at least one employee’s 2015 W-2 wages? I understand that changing any answer above affects what is reported on the Forms.

16. Form 1094 and 1095 Preview Click this button to have the forms emailed to you. This button will show a Time Stamp.

17. Check your email Can take up to two hours for the email to arrive!

18. Preview Form 1094-C After you receive the email, return to the Reporting Essentials > Year End Processing. You should be taken to this same page. Once you have received the email, these buttons will appear.

19. Clicking to ‘download preview’ of either type of form will create a.pdf version for you to open.  Check your pop-up blocker!  Every internet browser has a different type of pop-up blocker that might block your Forms download. Preview Form 1094-C When you click to download the Forms, the button will timestamp.

20. The Forms will be downloaded to a.pdf file in your Downloads folder. Open the file to review it. Preview Form 1094-C

21. Reviewing Form 1094-C: The basics Form 1094-C is the employer Transmittal Form. This is filed with the IRS with each 1095-C Form. The employee does not receive the 1094-C. Only one 1094-C is generated for each company. Each 1094-C has 3 pages: The 1 st page includes information about this Applicable Large Employer “ALE”. The 2 nd page has employee counts. The 3 rd page lists other companies that are part of your “Aggregated ALE Group”. This would be other companies you are affiliated with.

22. Form 1094-C: Part I Box 1-8: This information comes from Slide 11 Box 9-16: If you have a Designated Government Entity filing on your behalf, this information would be populated here. Box 18: This count is displayed on the ACA Comply page Box 19: This is checked off when the Form is e-filed.

23. Form 1094-C: Part II Qualifying Offer Method (A) is optional in 2015 – therefore the system will NOT include it. This includes Indicator Codes 1A and 1I on Line 14 of the 1095-C Form Checkbox C – This gets checked off when you answered the questions shown on Slide 12. (50 to 99 Full-Time Equivalent Employee Transition Relief, or 100 plus Full-Time Equivalent Employee Transition Relief)

24. Form 1094-C: Part III Should section (a) be checked off if the employer offered minimum essential coverage – No Section (e) will be populated with A or B depending on relevant transition relief (depends on your answers from Slide 12)

25. Just like with the 1094-C, you must click to ‘download preview’ of the form to create a.pdf version to open.  Check your pop-up blocker!  Every internet browser has a different type of pop-up blocker that might block your Forms download. Preview Form 1095-C When you click to download the Forms, the button will timestamp.

26. Preview Form 1095-C The Forms will be downloaded to a.pdf file in your Downloads folder. Open the file to review it.

27. What to look for on Form 1095-C Who gets a 1095-C? Every employee who was categorized as Full Time for at least ONE pay period in 2015. Also, Part-Time employee who received an Offer of Coverage in 2015 Each Form has 2 pages: The 1 st page must be reviewed in detail. The 2 nd page has the IRS instructions. Part I = employee’s and employer’s basic information Part II = the offer of coverage details Part III = only for self-insured health plans

28. Form 1095-C: Part I Always check the employee’s basic information (Part I). Box 2: SSN is masked in this preview. The SSN will not be masked when this Form is filed with the IRS. Box 3: The home address listed there is where the Form will be sent. Plan Start Month: this field is NOT required this year. It will not populate.

29. Form 1095-C: Part II Part II is populated mostly from the Offer of Coverage page. What do all of these codes mean? Line 14 – Offer of Coverage Indicator Codes Line 15 – Cost of Coverage related to Affordability Line 16 – Safe Harbor Indicator Codes

30. Form 1095-C: Part II Part II is populated mostly from the Offer of Coverage page. What do all of these codes mean? Line 14 – Offer of Coverage Indicator Codes Line 15 – Cost of Coverage related to Affordability Line 16 – Safe Harbor Indicator Codes

31. What constitutes an “offer of coverage”? If someone isn’t covered for the full month then it does not constitute an “offer of coverage for the month” Example: This employee was enrolled on 1/15/2015: He was not offered coverage for the month of January

32. Line 14 - Offers of Coverage Indicator Codes 1A – Minimum Essential Coverage (MEC), Minimum Value (MV), that meets Federal Poverty Line Safe Harbor was offered to Employee, Dependents and Spouse (aka “Qualifying Offer”) - Optional for 2015 – not being used 1B – MEC and MV was offered to Employee only 1C – MEC and MV was offered to Employee and Dependents 1D – MEC and MV was offered to Employee and Spouse 1E – MEC and MV was offered to Employee, Spouse, and Dependents. This offer is affordable, more expensive than 9.5% of the Federal Poverty Line.

33. Line 14 Continued 1F – MEC and non-minimum value was offered to you, and some combination of you, your spouse, and your dependents 1G – You were not full-time for any month in the calendar year, but you were enrolled in self-insured coverage for one or more months of the calendar year (must apply for all 12 months) 1H – No offer of coverage was made 1I – Employer claimed "Qualifying Offer Transition Relief" for 2015 and for at least one month of the year you (and your spouse or dependent(s)) did not receive a Qualifying Offer - Optional for 2015 – not being used

34. Line 15 – Cost of Coverage What is being reported is the required employee contribution for the lowest-cost self only plan It does not matter which plan they enroll in It does not matter if they enroll in something other than employee-only coverage The system programmatically determines the cheapest plan out of all plans that are offered This only gets reported if Indicator Code 1B, 1C, 1D, or 1E are entered for Line 14 of the Form

35. Line 16 – Safe Harbor Indicator Codes 2A – Employee was not employed during the month 2B – Employee was not a full-time employee (or not a full-time employee for the entire month) 2C – Employee was enrolled in coverage This is the priority code. If an employee elected coverage for EVERY day of a month, 2C will populate. 2D – Employee was in a non-limited assessment period Waiting Period Initial Measurement Period 2E – Multiemployer Interim Relief Rule applied Unique rule for employers with Union Employees

36. Line 16 Continued 2F – W-2 Affordability Safe Harbor applied (see note on slide 15) 2G – FPL Affordability Safe Harbor applied (see note on slide 15) Plan must cost under $92.39/month to meet the Federal Poverty Limit Safe Harbor If this code applies (and employee did NOT elect coverage), this is the 2 nd priority code. 2H – Rate of Pay Affordability Safe Harbor applied (see note on slide 15) 2I – Non-Calendar Year Transition Relief applied Identified in the Plan Builder

37. Form 1095-C: Part II What to look for? If any data applies for the whole year, it will be populated only in the All 12 Months box. Don’t forget: Line 15 only gets populated if Line 14 has 1B, 1C, 1D, or 1E Line 16 also will not be populated if a code does not apply.

38. Form 1095-C: Part III Covered Individuals Only applies for employers providing self-insured coverage Includes “partially self-insured” SSN not required; DOB in place if SSN cannot be obtained Dependents, COBRA Beneficiaries, Retirees (Non-employees) Part-time employees that are covered Dependents only need to be imported into the system and reported if they were covered by the plan

39. Example 1 Employee is full-time all year Coverage is offered but waived Coverage is affordable under the W-2 Safe Harbor. Since it costs more than $92.39/month, Line 14 is not populated with 1A.

40. Example 2 Full-Time Employee was offered coverage all year. He enrolled all year, and two dependents enrolled as well. Plan is self-insured.

41. Example 3 Employee was full-time all year Employee was not offered coverage any coverage all year. Note there is no indicator code in Line 16: Instructions state there does not need to be one if one does not apply

42. Example 4 Employee was full-time and terminated in August Employee was offered coverage while he was an active employee. He enrolled through 8/31/2015.

43. Example 5 Employee was not offered coverage all year Employee was part-time for 10 out of 12 months Employee was full-time for 2 months (Line 16 is blank Aug. & Sep.) Line 15 is blank because the employee wasn’t offered the plan.

44. Example 6 Employee was full-time all year and was offered coverage Employee enrolled from 1/1/15 to 5/31/15 and then re-enrolled from 8/1/15 through the rest of the year

45. Example 7 Employer indicated they were eligible for Non-Calendar Year Transition Relief and plan renewed on 4/1/2015 This is why there is “no offer” from Jan – March With no offer, Line 15 is blank, and Line 16 says there was no offer made. Employee was full-time, offered coverage from 4/1/2015 through 12/31/2015 and elected coverage

46. Example 8 Employee was full-time in January and February, but was part-time March-June. Coverage is offered all year. Celine elected in January and February only. In July, when employee became full-time again, the Safe Harbor code can populate. Coverage is affordable under Federal Poverty Limit Safe Harbor.

47. Form 1095-C: Part I – Fixing Errors What if there is an error? Box 1-6 errors: must go to Reporting Essentials > Employees. Then that employee. Box 7-13 errors: Return to questions shown on Slide 11. Use the Prev Step buttons to scroll backwards to those questions. After making your changes, use Next Step to move forward to Slide 18 and then re-create the forms.

48. Form 1095-C: Part II Correcting the Codes Someone was offered but it is saying they weren’t Make sure the EE is listed on the Offer of Coverage page. Once data is updated then the User would restart the Year-End Workflow and regenerate the preview forms Coverage was Affordable but it is saying it wasn’t Check that the premiums are correct in Plan Builder. Check that the EE is listed with an Offer for the lowest cost plan on the Offer of Coverage page. If you made a change, you must restart the Year-End Workflow and regenerate the preview forms

49. Form 1095-C: Part II Correcting the Codes What if there are unexpected or whacky outcomes? Check data Offer of coverage dates, hire dates, termination dates DATES ARE KEY! Example: Client identifies something appears incorrect on an employee’s 1095-C Employee hire date = 10/12/2015 Offer of Coverage enrollment date = 1/1/2015 Still actively enrolled Need to Edit their Offer of Coverage to the correct Date of Offer

50. Filing the Forms Two Separate Steps in Compliance Fulfillment – furnishing employee statements Distributing 1095-C Forms to applicable Employees Due Date: March 31 st, 2016 (after extension which has been provided by IRS) Employer can begin to complete this process 1/15/2016 in our system E-filing – Electronic submission of 1094-C and 1095-C Forms to the IRS Due Date: June 30 th, 2016 (after extension which has been provided by IRS) Employer can begin to complete this process IRS has not started accepting electronic submissions Sufficient time must be allowed for employers to make corrections Name changes, SSN’s, Offers, etc.

51. Contact Us Have more questions? Please visit our ACA Comply Resource Center to access our guides.ACA Comply Resource Center You can also contact Helena Manzella at: 215-654-9140 ext. 216 hmanzella@proxushr.com