Employee Benefits. ACA Reporting Solutions & Technology Update. Presented by: Jaime Hawkins President and CEO Benefit Technology Resources, LLC

Transcription

1 Employee Benefits ACA Reporting Solutions & Technology Update Presented by: Jaime Hawkins President and CEO Benefit Technology Resources, LLC Moderated by: Jeff Kolker GCG Financial, Inc. Senior Vice President, Benefits Consulting

2 Today s Agenda 1. ACA Overview 2. Market activity 3. Changes in the Technology Market and 1095 Reporting 5. ACA Technology Trends 6. Provider Solutions 7. Next Steps 2

3 Who Is BTR? Benefit Technology Resources (BTR) is the largest mid-market HR technology consulting firm in the US. Combined, our team has over 200 years experience in HR Technology. We are independent provider agnostic (not tied to any providers). We specialize in HR technologies that include: - Healthcare Reform Compliance - HRIS Human Resource Information Systems - Benefits Administration - Payroll Administration - Time Keeping - Talent Management 3

4 What Is Happening In The HR Technology Market? HR technology is at the top of the shopping list for IT leaders this year, especially those in smaller firms. According to a 2015 report from marketing agency The Starr Conspiracy Intelligence Unit, 53 percent of companies with more than 1,000 employees plan to invest in human resources technology software this year, but that number jumps to 60 percent among firms with more than 100 employees. Unprecedented ACTIVITY Unprecedented CHANGE Via 4

5 ACA - Employers Need Tools To Comply Tracking hours and eligibility from multiple data sources Manage scheduling to control eligibility Offering and tracking coverage offers De-enrolling employees on a timely basis Forecast Penalties Notification requirements New IRS reporting * * The requirements have been building and 1094-C and 1095-C are the latest 5

6 Getting Down To Brass Tax PWC survey in April 6

7 Getting Ready For ACA Reporting 7

8 What Do Employers Need To Track? General Reporting Full Reporting for all full-time employees (regardless of coverage status) Full Reporting of all covered employees (including dependents if selffunded) Report on a month-by-month basis: - Lowest cost monthly premium for self-only coverage - To whom was coverage offered (employee, spouse, dependents) - Did the coverage provide minimum value? - Indicator codes will be used to report certain other information - Covered Dependent Information if self-funded Employers filing 250 or more Forms 1095-C must file the forms electronically to the IRS (Form 1094-C) 8

9 1095-c Due 2016 For Calendar Year 2015 All ALEs Required to complete Sections I & II Self Funded ALEs Required to complete Section III 9

10 What Do Employers Need To Track? Date of hire Hours worked and paid Termination date Hours not worked but paid Date of birth Payroll period begin / end date ACA FT status date Jury Duty State of residence FMLA SSN USERRA (Military leave) Proof of offering Other state mandated leaves Status indicator (i.e., enrolled/waived) Start / End dates of leaves Plan funding (i.e., insured/self-insured) Intermittent FMLA time / dates Employee Share of Lowest Cost Monthly Premium, for Self-Only Coverage Dependent Coverage & Demographic data 10

11 What Do Employers Need To Track? COBRA - Configure COBRA Eligibility Group in benefits admin and load all employees and elections back to 1/1/15. Retirees Board members offered medical coverage Union Employees Temporary workers who is providing 1095-C Contract workers Paid vs. unpaid interns Students teachers/ Student workers this impacts the educational industry in a huge way Employees and Spouses that are employed by you Could require additional work to locate and consolidate data

12 What Do Employers Need To Track? DETAILS The relationship YOU between true plan premium and incentives will influence affordability Tobacco related assumes non smoker regardless of status Wellness assumes no wellness or other incentives Missing Dependent Data (self funded employers) Identify dependents without SSN s change procedures to capture Perform annual solicitation via paper and phone (1 electronic attempt of 3)

13 1094-c Due 2016 For Calendar Year 2015 All ALEs Required to Complete Confirm Control Group Status 13

14 Case Study INTUIT 3000 Employee Employer TurboTax tax service for employees 30.5 million consumers Intuit Tax Prep Service for Accountants 121,000 accountants Learning Very little awareness of health ins and tax return intersection Only 75% of consumers were insured for 12 months 55% of 1095-C recipients used Turbo Tax through a mobile device. Tax refund delays caused anger and stress for the employee 1095-C pilot drove calls from more than 25% of the population Implication Prepare employees to understand forms Prepare employees for all ACA tax reporting, not just 1095-C Leverage mobile delivery Be prepared during January to quickly address issues that will delay an employees refund Be prepared in a timely manner to answer questions

15 When Do Employers Need To File & For What Period? Mandatory reporting is due for the Calendar Year 2015 February 1, 2016 Employee Statements (1/31 is a Sunday) February 29, 2016 IRS Statements due if filing by paper March 31, 2016 IRS Statements due if filing electronically Required if filing 250 or more forms Penalty Relief for 2015 Employers who show a good faith effort to comply will not be liable for accuracy related penalties However, if you report inaccurate data to the IRS there will be clean up needed (reissue 1095-C and 1094-C) 15

16 The New Penalties In 2016 For The 2015 Calendar Year: Penalty Old Amount New Amount Failure to file/furnish an annual IRS return or provide individual statements to all fulltime employees $100 $250 Annual cap on penalties $1,500,000 $3,000,000 Failure to file/furnish when corrected within 30 days of the required filing date $30 $50 Annual cap on penalties when corrected within 30 days of required filing date $250,000 $500,000 Failure to file/furnish when corrected by August 1 of the year in which the required filing date occurs Cap on penalties when corrected by August 1 of the year in which the required filing date occurs $60 $100 $500,000 $1,500,000 Lesser cap for entities with gross receipts of not more than $5,000,000 $500,000 $1,000,000 Lesser cap for entities with gross receipts of not more than $5,000,000 when corrected within 30 days of required filing date Lesser cap for entities with gross receipts of not more than $5,000,000 when corrected by August 1 of the year in which the required filing date occurs $75,000 $175,000 $200,000 $500,000 Penalty per filing in case of intentional disregard. No cap applies in this case. $250 $500 16

17 How Do Employers Track? Eligibility, Benefit Status, Dependent Information, Waive Reasons, Coverage Begin dates, end dates Employee Data, Affordability Safe Harbor Hours worked, Full Time Equivalent Status 17

18 How Do Employers Track? Static Reports Point in time & effective dating Dynamic Reporting/Modeling Projection capabilities Dashboards 18

19 What To Consider Do you have a system or several systems housing ALL the data necessary to produce the ACA Reporting? NO YES 19

20 What To Consider These reports are not due until 2016, we have plenty of time right? NO - we are already experiencing capacity issues You must provide a contact phone number for every employee s form Forms must be submitted to IRS in Native XML uncompressed format (file size limitation of 100MB) 20

21 What To Consider IRS information from IRS.gov : Each provider that submits forms has to have a UniqueRecordIDType The process of defining a unique Record ID Type Element is defined in publication 5165 Guide for electronically filing Affordable Care Act Information Returns for Software Developer and Transmitters (processing year 2015) Does the file require a specific encoding types? Yes, MTOM coding is supported. (Message Transmission Optimization Mechanism, a method of efficiently sending binary data to and from Web services) 21

22 Timeline To Consider 8/1/2015 Implementation starts 10/1/2015 Client goes live on new ACA Platform 11/1/2015 Data is loaded back to 1/1/15 12/31/2015 Reporting Period Ends 2/1/ C Forms Due to Employees 2/29/2016 Forms due to IRS if filing Paper 3/31/2016 Forms due to IRS if filing Electronically (only option if over 250) 22

23 ACA Tracking Stand Alone Platforms Coverage options 23

24 ACA Tracking Stand Alone Platforms 1. Equifax Geared to larger employers (1000+), employees can print or self serve statements. Contracts must be signed by 7/31 for a 2015 go live. Employer can t change or amend contract. 2. Health e(fx) - Geared to larger employers can print or self serve statements. No longer taking clients for Syncstream - Geared to small mid size employers. 10/1/15 deadline 4. Worxtime - Geared to larger employers, can print or self serve statements. Call center is imbedded and can t be removed. 10/1/15 deadline 5. Tango Geared to large employers, robust employer and employee advocacy with call center. Cadillac provider but worth it for employers who want more help. No deadline as of yet. 24

25 Risk Considerations Operational: more demand than capacity Security: new entrants, not much to start a co. Technology: lots of data but is it secure? Financial: new entrants, low E&O coverage Business Attributes: compliance expertise? Platform: early stage 25

26 What We Expect Will Probably Happen Service Providers will: Not get it right Over-commit and under-deliver Get purchased by adjacent players Regulations will continue to change, creating challenges for service providers Free will quickly become fee-based Fees will be unstable for at least 2 years Capacity will be stretched **ACA may not available on 4 th quarter builds because of bandwidth** IRS will be overwhelmed 26

27 ACA Support Service Providers ACA Support Tools Stand-Alone Integrated HRT/Payroll Integrated BA 27

28 BSWIFT Continues to be a strong player in the benefits admin space, Is the ben admin module for Paylocity, Paycor and PrimePay (Paycor is new) Strong integrated ACA module ACA module is an additional $1.00 PEPM What they are telling us: there will be limited resources during Q4 to implement the ACA tracking and variable hour dashboard 28

29 PAYLOCITY Client can input or import the data for ACA by employee into Webpay manually and Paylocity will handle the 1094/1095s. Basic reporting included in HRIS/Benefits/Payroll platform. Essential Package - for $5.50 per 1095-C form. This includes basic ACA dashboards, reporting and filing. Forms will require manual input on the part of the employer. Enhanced package - is a full analysis and compliance tool, with less manual work, $1.25 PEPM and the 1094/1095s are included. (recommended option) If your client has paylocity payroll and bswift for benefits, ACA reporting will be done out of payroll. 29

30 ADP Requiring some clients to upgrade this can be a high cost, and timing (only so much capacity). Migration costs can be waived based on version. Priority is based on new revenue. If on Workforce Now Employer must have HRB and have it configured. A separate stand alone ACA Module $1.50 PEPM Essential ACA being rolled out now. There is an additional cost for the enhanced ACA tools which includes subsidy tracking. 16 platforms in the market Older versions of the software do not appear to be as easy to use when tracking ACA, but it can be done. 30

31 PLANSOURCE Robust ACA Module - PlanSource will be able to pull all the necessary information to complete the 1094/1095-C forms. They will complete and mail the 1094-C form for the employer and the 1095-C forms will be available to the employee for download. The fee is $1.00 PEPM with a $3.00 per employee implementation fee. The $1.00 will be retro-billed back to January 1, Implementation of ACA with variable hour tracking is 2-4 weeks. There will be limited resources during Q4 to implement the ACA variable hour dashboard. Benefits module does have integration with Paylocity - single sign on to come with volume. 31

32 BENETRAC/ PAYCHEX Benetrac Stand-Alone will not handle ACA reporting. If a client has all the Paychex modules: Payroll, HR, Benetrac, and Time. ACA is included in the ESR cost. There is a cost for ESR, but everything within ESR (including filing, e- filing, creating the forms, etc.) will be included. Cost of actual forms not included. For non-paychex clients tracking and reporting of variable hours is available, coverage adequacy and affordability, end of year benefits reports that include information needed for filings. If the client doesn t have a benefits module they will be able to manually enter this data online or import a spreadsheet. The ACA tool is $.25 PEPM - $1.00 PEPM with a set up fee. No other automatic ben admin integration is planned other than BeneTrac. Other ben admin users would need to get an Excel export from their system that can then be imported into the Paychex ESR tool. 32

33 BENEFITFOCUS If a client has Benefitfocus Equifax, or Heath fx for ACA will have to be offered. This is not a fully integrated solution. If a client is utilizing both Benefitfocus and Equifax, then the majority of the information needed to complete the 1094/1095-C forms would be pulled from Benefitfocus and the remainder direct from the client and their resident payroll system. The forms would be completed by Equifax. If using Equifax for your fulfillment the costs are: $5000 annual plus $0.85+postage per form. The $5000 pays for the portal that: offers an electronic copy for those who approved receiving that format, an electronic reprint option for employees, and direct integration with the markets major tax providers for auto load on an employee s tax return. 33

34 Best Practice Recommendations 1. Be sure you check with your current payroll provider as a 1 st step. The more you can keep with your primary provider the better. 2. If you haven t already deploy a benefits administration module, this will automate the benefits tracking needed for ACA compliance. 3. If your benefits admin or payroll provider can t support ACA reporting you will need to deploy a stand-alone ACA module Do it now, don t wait. Your provider is going to have to load data back to 1/1/15 34

35 Questions? If you have any questions please contact your GCG advisor, visit or call Headquarters GCG Financial, Inc. Three Parkway North Suite 500 Deerfield, IL T Jeff Kolker GCG Financial, Inc. jeff.kolker@gcgfinancial.com Senior Vice President, Benefits Consulting Other locations Chicago, IL Springfield, IL Schaumburg, IL Bloomington, IL Denver, CO 35