1. Tom McDonald
Presentation for:
July 5, 2016
2017 ACA

2. Disclaimer
Performance HCM provides this information on the Affordable Care Act (ACA) for general guidance only. This does not constitute the provision of legal advice, tax advice, accounting services or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal or other advisers.

3. Agenda Overview of the Affordable Care Act (ACA)-Setup
Election Form is required. (1st deadline was )
Group or self insured plans defined
Benefit Plan (Lowest cost benefit)
Define Measurement/Stability Periods
Review Pre-set up and check list
Keys to ACA iSolved
Review forms 1095-B and 1095-C
Reports
ACA Dashboard

4. Self Insured or Fully Insured
In the health insurance marketplace there are primarily two types of funding an employer group can choose: self-insured and fully-insured. The essential difference between the plans is who assumes the risk for the claims generated by the employees. In a fully-insured plan the risk falls on the insurance company.
A self-insured group health plan (or a 'self-funded' plan as it is also called) is one in which the employer assumes the financial risk for providing health care benefits to its employees. (Form 1094B if under 50 employees)
A fully-insured health plan is the more traditional way to structure an employer-sponsored health plan. With a fully-insured health plan: The company pays a premium to the insurance carrier. The premium rates are fixed for a year, based on the number of employees enrolled in the plan each month. (Form 1095C for employer with 50 or more employees or self-insured company with 50 of more employees).

5. Benefits
This information will be used to define the lowest cost plan offered. The amounts will be broken down by payroll frequency and all plans in effect for the year will need to be identified.

6. Measurement Period
Measurement period typically runs for 12 months with the last 2 months being your open enrollment period.
Stability period typically begins the same time as your plan period.
Both periods must run for the same number of months. 

7. iSolved ACA Screen EE MGT ACA Measurement Period
This screen is located under Employee Management\Employee Benefits\ACA Measurement Period. It will give you the current and historical ACA status of each Employee. Remember, this is based on the Measurement policies you entered under Client Management. You cannot change anything on this screen. It is for informational purposes only.

8. Payroll Pre-set up for iSolved ACA
Categories for employees that are not FT or PT – dependent upon your business model - iSolved uses Memo Calcs for these and for “Special Unpaid Leaves” (SUL) as defined by the IRS. Any of the hours reported by a variable hour EE for these types of leave need to count toward the EE’s cumulative hours which decide if they should be offered benefits.
An ACAHRS accumulator to include the SULs and hours for any other earnings code that you would like to include. These will be hours that will count towards a Variable EE’s 30 hr. a week ACA threshold.
The system can only pull hours that it has recorded. If the ACA measurement period you are going to use exceeds the hours history you have in the system, you will need to discuss getting the hours history brought in.
The system can only use the EE Category history that it currently has. If the ACA measurement period you are going to use exceeds the history currently in the system, you will need to discuss getting the history brought in (i.e. PT for part of the year and FT for part of the year). We also need to know when each status started and stopped (except for current status.)

9. ACA Check list for iSolved
Let’s look at a checklist for fields in the iSolved system that will allow the system to accurately track and offer benefits to those who may have qualified. You will want to verify that these fields are setup accurately so the system will act as designed.

10. Preparation Checklist for ACA Reporting in iSolved
Confirm that the Employment Category History is correct and complete for each EE. This information is found in EE Management \EE Maintenance\Employment.
Confirm that the ACA status associated with each Employment Category is correct.
Key to ACA Statuses:
ACA Full Time = Benefits are already offered to EE
ACA Variable = Need to monitor hours to see if EE merits Medical Benefits.
ACA Exempt = No need to offer benefits or monitor EE’s hours. (Ex 1099)
Your eligibility rules have the correct filters on them, and they are applied to the correct benefit plans.
Remember!
For the 1095-C form, in iSolved, eligibility for a plan = offer of coverage.
Continued on next slide

11. Preparation Checklist for ACA Reporting in iSolved
Therefore, if an EE is not showing eligible for the correct plan(s), his line 14 of the 1095-C (offer of coverage) and his line 15 of the 1095-C (EE share of lowest cost monthly premium for self-only minimum value coverage) may be incorrectly auto-populated.
If John is eligible for 3 different medical plans, then the system will choose the one that has the lowest cost EE only coverage that he is eligible for, and report the information from that plan on line 15 of the 1095-C, regardless of which plan he actually chooses/enrolls in.
You have a good understanding of the Code Series 1 & 2. (1095-C line 16 , Section 4980H Safe Harbor Codes and Other Relief for Employers – Code series 1 begins on page 10 of the link below.)
Name your Policy Group(s). If you are only using one measurement setup for the entire company, you only need to set up one Policy Group
Set up the Initial Measurement period
Confirm that an “ACA Hrs. Met” Eligibility Rule is set up and added to every MEC and MV Medical Plan.
Continued on next slide

12. Preparation Checklist for ACA Reporting in iSolved
For self-funded plans, you have confirmed that all covered dependents on your medical policy are listed in iSolved along with their SS# and are enrolled . If you don’t have the dependents’ SS#, the IRS will allow you to use the DOB if you have made 3 reasonable attempts to collect the dependents’ SS# from the EE. This information will populate Part III of the 1095-C form and Part IV of the 1095-B form.
You need to validate the form type prior to 12-31
The 1094-B and 1095-B forms are filed by self insured employers who are not considered ALEs.
The 1094-C and 1095-C forms are filed by ALEs whether self-insured or fully-insured.

13. The Keys to ACA in iSolved
As long as the plans are set up correctly and the eligibility rules are set up correctly, the 1095-C will auto-populate lines 14 & 15 on the 1095-C.
As long as the EE is enrolled in the correct plan and his dependents are enrolled as well, the 1095-B will auto-populate.
Covered dependents should be entered under the employee contact field and checked as a dependent on the employee benefit screen
As long as the EE is enrolled in the correct plan, line 16 on the 1095-C will auto-populate with 2C and Part III will populate for self funded plans.
You should ALWAYS still review each form for correctness before approving the forms for Printing and Filing.
Double check the Code that populates on line 16 of the 1095-C form as there are some “Code Series 2” codes that we cannot calculate.

14. Form
Purpose
Who files
Who receives
Deadline
Notes
1094-B
Cover sheet that accompanies the 1095-B Forms
Health insurance issuers or carriers
Small, self-insured employers
IRS
February 29, 2016
 (leap year)
March 31, 2016 for electronic filers
Must be filed with Form 1095-B
1095-B
Statement indicating which months the individual and any dependents were covered by Minimum Essential Coverage
Employee/
Health plan participant
Send to last known address
May provide electronically with recipient’s affirmative consent
1094-C
Cover sheet that accompanies the 1095-C Forms
Summary information for each employer including certifications of eligibility, aggregate group member information and any transition relief that may apply
Applicable Large Employers (ALE)-those with 50 or more full-time employees (including
full-time equivalent employees)
Must be filed with Form 1095-C
Reports summary information for each employer
Used in determining whether an employer owes a payment under the employer shared responsibility
1095-C
Statement reporting on offers of health coverage and enrollment in health coverage for employees
For self-funded employers, reports which months the individual and any dependents were covered by Minimum Essential Coverage
ALE (Employers with 50 or more full-time employees (including
Each full-time employee
(leap year)
Employee
February 1, 2016 (due to January 31, 2016 falling on Sunday)
Used to determine eligibility of employees for the premium tax credit

15. Example of form 1094-C .
iSolved populates using ER Demographic Information
Automatically calculates
Does not include 2nd employee page when applicable
iSolved populates based on boxes checked on the ACA Report Options Page

16. iSolved populates based on Options selected on ACA Report Options (A or B) and if no option is selected it is based on a system calculation .
Calculates from system data
Calculates from system data
iSolved populates based on boxes checked on the ACA Report Options Page
iSolved populates based on boxes checked on the ACA Report Options Page (C)

17. .
Populates based on Reporting Groups selected on ACA Report Options Page
Important note: Include only the first 30 ALE members. If there are more than 30 ALE members, report the largest (by employee count) 30 members.

18. Example of form 1095-C .
iSolved populates based on EE demographic information
iSolved populates based on benefit plan setup and EE benefit information this should only populate if you are self insured

19. . Override screens are available for these fields EE Benefits Menu
iSolved populates based on Measurement Policies and Benefit Eligibility .
iSolved populates based on lowest EE rate in the benefit plan setup
For new employees iSolved populates based on Measurement Policies, Benefit Enrollment and Affordability
Override screens are available for these fields
EE Benefits Menu

20. If the 1095 does not populate like you expect, use the grid below to help troubleshoot where the issue might be. Example 1: If Line 14 isn’t populating the 1A code you expect, check the Eligibility Rules and the Benefit plans. Example 2: If you are expecting a 2H in line 16 and it does not appear, check the EE’s salary record.

21. Forms and Reporting Self Funded Benefit Plans
What are Forms 1094-C and 1095-C
Forms and Reporting Self Funded Benefit Plans
1094-B
Transmittal “cover sheet” submitted to the IRS with the 1095-B forms
1095-B
Statement indicating which months an individual and any dependents were enrolled in qualified coverage
Submitted to the IRS and the covered plan participant
Provides covered participants with information necessary to show compliance with the ACA individual mandate

22. ACA Report Overrides When you decide to change the values on the 1095 Form…
This is an area where you the Customer must educate yourselves. If the measurement periods are set up correctly, and the correct eligibility rules are used with Benefit Plans, the system will calculate and pre-populate the 1095-C form. (Overrides may be needed but only in special circumstances)
Any changes or corrections to this form will need to be determined by you the client. You will need to know what code goes where.
Example: Line 16 Codes 2A-2D and then 2F-2H can be calculated by the system. Code 2E and 2I cannot be calculated by the system and if either apply, you the client must use the override screens to change this (manual or import). Only you the client will know which to use. You must educate yourselfselves if you do not know.
For those who use the monthly measurement you can enter override codes for line 16 (if used) as we cannot accurately assess the beginning of any waiting period an employer may apply to an employee under the monthly measurement period.
Ultimately it will be you the client’s responsibility to determine and declare the 1094 and 1095 forms correct and ready to be printed/filed.

23. Approval process for all forms
You must review the 1094 and each 1095 form to ensure accuracy and completeness. Once you have done this, you will use this screen to approve the forms.
NOTE: Performance HCM will not print and file your forms until you approve them dead line is December 29th for ALL final approvals.
NOTE: The 1094 form will not Print. It is only transmitted electronically.

24. Reports There are 4 Standard ACA reports
ACA Full Time Look-Back Report – You will most likely not need to use this report if you have the ACA Pro service. The Look Back Change in Status Report will serve you much better because you have the Measurement Policies set up. If you do choose to use this report, a measurement period is required each time you run the report.
ACA Large Employer Compliance Test – This report will help you determine if you are an ALE. If you are using this PowerPoint, odds are that you are. This report is not needed if know your ALE status.
ACA Affordable Coverage Determination Report - This report will help you determine if your MEC & MV plans are below 9.5% of the Federal Poverty Line. If not, it will help you determine if one of the other two Safe Harbors (below 9.5% of the EE’s Rate of Pay or below 9.5% of the EE’s W-2 Wages) will allow you to stay in compliance. Each time you run the report you much choose one of the safe harbors. You cannot run all three Safe Harbors at once.
ACA Plan Renewal – Affordability Projection Tool – This report is very similar to the Affordable Coverage Determination Report, however instead of pulling the premium costs from the Benefit Plan Rate Table, the system will allow you do enter the Annual Cost for EE only coverage that you would like to project and then the report will let you know if you are compliant. This report can only be run on Rate of Pay and W2 Wages Safe Harbor. The system expects you to be able to figure out 9.5 of the Federal poverty line each year. That number would be the same for ALL EEs.

25. Is the coverage affordable?
Review Questions
Is the coverage affordable?
iSolved’s ACA Affordable Coverage Determination Report
Employer-provided coverage is considered affordable and not subject to penalties if it meets one of 3 IRS safe harbors
Federal Poverty Line (FPL) Federal Poverty Line
Form W-2 Wages Current Year Projected W-2 Wage
Rate of Pay Rate of Pay Annualized
May use one or more safe harbors if applied on a uniform and consistent basis for all employees in a category

26. Safe Harbor - Federal Poverty Line
Employee’s contribution for lowest self-only coverage does not exceed 9.5% of the federal poverty level
For 2016 FPL = $11,880
For 2017 FPL = $12,060
May use guidelines in effect six months prior to the beginning of the plan year
iSolved uses 2017 level in reports

27. Safe Harbor- Form W-2 Wages
Employee’s contribution for lowest self-only coverage does not exceed 9.5% of employee’s wages as reported in Box 1 of the W-2
This iSolved report takes YTD wages at the time of report and projects them forward. This means that if the EEs have had OT, Bonuses or Commissions in the early part of the year that are not “normal” for the EE (i.e. will not be continuing throughout the year), then this report would not accurately reflect the EEs final W2 wages.
Can only use year-end final numbers for safe harbor. The closer you get to the end of the year, the more accurate this report becomes and is 100% accurate by the end of the year.
Adjusted for partial year employees including terminations and new hires

28. Safe Harbor- Rate of Pay
Employee’s contribution for lowest self-only coverage does not exceed 9.5% of the following:
Hourly employee: an amount equal to 130 hours multiplied by the employee’s hourly rate of pay as of the first day of coverage or lowest hourly rate of pay during each calendar month
Salaried employee: an amount equal to their monthly rate of pay but cannot be used if monthly salary is reduced, including by reason of reduction in work hours
Is not dependent on actual hours worked.
Cannot be used for tipped or commission-only employees
The EE’s Normal Hours field and Annual Salary field must be completed or the system cannot calculate this report

29. Report -Affordable Coverage Determination report
Can use anytime but will not be 100% accurate until 12/31 for the W2 wages Safe Harbor
Allows choice of 3 safe harbor options
Helpful if different plans are offered among different groups of employees
Final report shows only employees that do not meet the safe harbor criteria

30. Report Results – Federal Poverty Level
Valuable tool to assist in determining what is needed for compliance with this SH method
Easily identifies compliance issues
Pulled from the benefit plan setup
Demonstrates how one plan meets safe harbor but other plan does not

31. Report Results – Form W-2 Wages
**Use as a Guide only until 12/31**
Extrapolates W-2 income based on YTD income and remaining pay periods for employees hired in current year

32. Report Results – Rate of Pay
Clearly shows whether the new rate is compliant and the parameters that would achieve compliance.

33. Report Affordability Projection Tool
Takes populated rate and applies Safe Harbor calculation to determine if plan will continue to meet criteria based on the new rate

34. ACA Dashboard

35. ACA Dashboard

36. ACA Dashboard

37. ACA Dashboard
Note: This chart represents the Enrollment Period.

38. ACA Summary Next Steps:
Provide updates to all Benefits Plans effective in 2017
Finalize Measurement and Stability periods
Use Reports to Review your data and be sure approve- the final review is required to be completed by
Performance HCM will process your 1094-C and 1095-C reporting with the IRS only if elections forms have been received.
Send questions to or contact your CSR.

39. Important dates
Completed Enrollment Form – Due , if received after this date cost will vary.
Updates to benefit plans – No later than
Benefit plan updates must be received one month prior to the effective date of the plan.
Updates to all employees –No later than
Remember your FINAL validation should happen no later than to ensure all filings can be printed and filed timely.
ACA will be closed for edits after

40. Thank you for attending
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