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Affordable Care Act Reporting Munis: Payroll

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[MU-PR-7-B] [MU-PR-11-A] Affordable Care Act Reporting Munis: Payroll CLASS DESCRIPTION The Affordable Care Act has given new tracking and reporting requirements to employers and coverage providers. This
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[MU-PR-7-B] [MU-PR-11-A] Affordable Care Act Reporting Munis: Payroll CLASS DESCRIPTION The Affordable Care Act has given new tracking and reporting requirements to employers and coverage providers. This session will cover what those requirements are and how to leverage Munis functionality to complete them. We will cover where the information will come from for reporting, how it needs to be tracked, and how reporting will be completed. Due to session time limits the overview will be at a high level, and other resources to find additional information will be examined. EMPLOYER REQUIREMENTS FOR THE AFFORDABLE CARE ACT The Affordable Care Act defines many aspects for how health insurance needs to operate. It includes provisions for what benefits any health insurance needs to include, the amount of coverage that insurance must provide for qualifying expenses, who has to have health insurance, and who has to offer health insurance along with reporting requirements for insurers and employers to demonstrate compliance. It is an extremely complex piece of legislation with many facets. In this presentation, we will examine the pieces of the law that may apply to Munis users, and how clients can ensure that they are in compliance with those provisions, and can correctly complete necessary reports and filings. The Employer Shared Responsibility Provision of the ACA Generally, a payment will be assessed under section 4980H (Employer Shared Responsibility provision) if the employer either: 1. does not offer minimum essential coverage to its full-time employees (and their dependents) or (based on hours worked Munis and/or timekeeping system), 2. the coverage offered is not affordable or, 3. does not provide minimum value; And one or more of the full-time employees receive a premium tax credit for purchase of coverage on an Affordable Care Act Insurance Exchange. Any employer then needs to be sure that they are in compliance with these three main criteria. Most public sector clients are easily in compliance with all three the most difficult part of the new requirements is more commonly demonstrating this compliance to the regulatory body (the IRS in this case), and providing them with information that they need to ensure not only compliance with this provision, but all provisions of the Affordable Care Act. To this end, the IRS requires new reporting from employers and coverage providers multiple pieces of which Munis clients may need to provide. Complying with these reporting requirements is no easy task this document will cover the reporting required as well as best practices for data maintenance to ensure that reporting is as simple as possible when required. TRACKING INFORMATION FOR AFFORDABLE CARE ACT REPORTING IN MUNIS The Affordable Care Act has two main reporting requirements that can apply to employers: Section 6056 reporting - Applicable Large Employers WHO PROVIDES SECTION 6056 REPORTING? This reporting applies to all Applicable Large Employers. In general, an Applicable Large Employer is one who employed an average of at least 50 FTE s throughout the year. For more information on determining ALE status see the Determining if an Employer is an Applicable Large Employer page on irs.gov. WHAT IS REPORTED IN SECTION 6056 REPORTING? Section 6056 reporting includes information on employee status, offers of coverage, and minimum cost of coverage for the employee. USE OF SECTION 6056 REPORTING The purpose of this reporting is to assist the IRS in managing not only the Employer Shared Responsibility Provision of the ACA (which is done by evaluating offer codes, Safe Harbor codes, and employee cost), but also in administration of the Premium Tax Credit. Individuals (employees, or spouses or dependents of employees) who are offered suitable coverage by an employer are not eligible for Premium Tax Credit subsidies to offset purchases of insurance from one of the Insurance Exchanges. This reporting then helps the IRS reconcile this disqualification as well. HOW SECTION 6056 INFORMATION IS REPORTED This reporting is provided to individuals via the 1095-C form (in Part II of that form) via a series of codes. Reporting is provided on a per-month basis. WHERE SECTION 6056 INFORMATION IS REPORTED FROM IN MUNIS Population of Part II of the 1095-C form is completed primarily from information contained in the ACA Period Records program. This program tracks whether employees qualified as Full or Part time in particular periods, whether or not they were offered coverage, and whether or not they enrolled in coverage. It also can specify that an employee was in a waiting period prior to enrollment or in an Initial Measurement period (prior to a Full Time determination being able to be made). Employee Master information can also be used to determine employment periods (identifying periods where an individual was or was not employed). Premium Table information may be used to populate employee insurance costs as well. The Generating and Maintaining 1095 Records document on the Knowledge Base has detailed information on this process and Offer and Safe Harbor codes are populated. 2 Section 6055 reporting- Providers of Minimum Essential Coverage WHO PROVIDES SECTION 6055 REPORTING? This reporting applies only to employers who offer self-funded (more commonly referred to as selfinsured) insurance. For employers who offer fully-funded (or full-insured) coverage where the employer simply pays a premium to an insurance company and the insurance company is responsible for payments to providers for claims the insurance company is the Provider of Minimum Essential Coverage and is the responsible entity for reporting under this section of the law. However in cases of self-funded insurance where the employer maintains their own pool of resources for insurance claims and is ultimately responsible for their payment the employer is the Provider of Minimum Essential Coverage, and is therefore the responsible entity for reporting under this section of the law. WHAT IS REPORTED IN SECTION 6055 REPORTING? Section 6055 reporting reports individuals who were covered under a plan that offered minimum essential coverage, and when they were covered under that plan. Any individual who was covered for at least one day in a month is reported as having had coverage for that month. Coverage for each individual is reported to the Responsible Individual (Primary Insured) for the plan that they were enrolled in. USE OF SECTION 6055 REPORTING The purpose of this reporting is to assist the IRS in managing the Individual Shared Responsibility Provision of the ACA. This provision states that all individuals must have qualifying health coverage (minimum essential coverage), or they must make a Shared Responsibility Payment when filing their taxes. The reporting provided by Providers of Minimum Essential Coverage under this section allows the IRS to reconcile that individuals should or should not have been subject to Shared Responsibility Payments during the reporting year. HOW SECTION 6055 INFORMATION IS REPORTED This reporting is provided to individuals via either the 1095-B form or via Part III of the 1095-C form. For employers who are also Providers of Minimum Essential Coverage, this allows those entities to report this information using a single form (1095-C), instead of two forms. WHERE SECTION 6055 INFORMATION IS REPORTED FROM IN MUNIS Munis has the ability to create, print, and file both 1095-B and 1095-C forms. In both cases, the information related to Section 6055 reporting can be populated based on information already in Munis. For Section 6055 reporting, Munis needs to be able to determine: 1. Who was covered under a self-funded plan 2. What the identifying information for that individual is 3. When that individual had coverage under that self- funded plan 3 These pieces of information are gathered from two different places in Munis depending on who the individual is. For employees, this information comes from the Employee Master (SSN) and from the Employee Coverage Dates section of ACA Period Records. For spouses and/or dependents of employees, this information (Name, SSN/DOB, and coverage Start and End dates) comes from Employee Dependents. Additional information on both sections of reporting (and how 1095 forms are populated to complete them) is available both in the Generating and Maintaining 1095 Records document on the Knowledge Base as well as within webinars linked to from the Additional Resources page of the ACA Wiki on Tyler Community. All resources mentioned in this documentation are referenced there or on the main ACA Wiki Page this page is the best source for guidance to further information on ACA tracking and reporting specifics in all their various facets. Here though we will examine the basics of and best practices for the ongoing tracking and maintenance of Affordable Care Act information in the Munis system. BEST PRACTICES FOR MAINTAINING AND LEVERAGING ACA INFORMATION Maintaining Affordable Care Act information for employees will not only allow for smoother reporting at the end of the calendar year, it can also aid in ensuring compliance with the law on an ongoing basis as well as allow for expeditious response to any requests for supporting information from the IRS to combat queries on whether or not an Employer Shared Responsibility payment should have or did not apply for a specific month. Regular data maintenance falls into three main sections, with three different timing concerns. In order to ensure that all employees who qualify as Full Time under the Affordable Care Act regulations are offered coverage, employers most commonly utilize the look back method for determining Full Time status. Under this method, time worked by employees over a Measurement Period is evaluated during a following Administrative Period to determine that employee s Full Time status over a corresponding Stability Period, during which the employee is offered coverage if they qualified as Full Time. The Affordable Care Act Reporting presentation from the User Conference in 2014 (available on the Knowledge Base) has more information on and examples of how to implement this process. To track this in Munis, the start and end dates of the mentioned periods can be defined, and records for employees can be automatically generated. Further, hours worked during the measurement period(s) can be reported on and leveraged to determine Full Time status. The document on the Knowledge Base entitled Affordable Care Act - Tracking Measurement Periods and Reporting on Hours Worked outlines these processes in detail and the July and August 2015 webinars in the Additional Resources section of the ACA Wiki cover these processes as well. What we will examine below are recommendations for the timing of the processes. Different times in the year call for different (though parallel) set of processes for tracking ACA information. What follows is a general outline of steps to take at specific points in time in the year. Depending on your need, some steps may be unnecessary or additional steps may be needed it is recommended that your specific process be examined to see what steps may be most relevant in the different time frames and how the general steps indicates may be refine or tailored to your organization s specific needs. 4 Periodic maintenance (throughout the year) Maintenance of ACA information for your employees begins when they are hired by the organization and does not end until the separate (and may even continue after that, if they have health insurance as retirees under a self-funded insurance plan). Throughout the year though in general the following points in time may necessitate or call for adjustments to ACA information (or other, supporting information). 1. As employees are hired a. Ensure Employment Start dates are correctly recorded When 1095 s are generated, the dates to use to identify Employment Start can be defined. It should be ensured that these dates are maintained appropriately when employees are hired to allow for proper determination of employment periods during 1095 generation. b. Ensure new employees have correct Initial Period records Initial Period Definitions can be set up so that Initial Period Records are added automatically. The Affordable Care Act - Setting up Initial Period Records document on the Knowledge Base outlines this process and explains proper setup for these records. 2. Periodically (per-payroll or per-month) a. Evaluate employees who are ending an Initial Measurement Period The Meas Per Range Start and Meas Per Range End dates on the Period Based Hours Worked report defined a date range that will limit records reported to be only those where the Measurement Period End Date falls within that range. This allows for periodic reporting of employees who s Measurement Period ended within a specific period. Periodically then, this report can be used to identify employees who have an Initial Measurement Period that ended recently, and allows examination of that employee s hours worked and the proper determination of their Full Time status. b. Offer eligible employees insurance Based on the determination made above, insurance can be offered to these employees as appropriate. c. Enroll eligible employees d. Update Employee Coverage Dates with enrollment data e. Add or Update Employee Dependents records as appropriate The previous three steps are the same as for Open Enrollment periods this just applies to employees who have worked for a full Initial Measurement Period, and so need to be offered insurance if they qualified as Full Time during that period. The corresponding description of these steps in the Prior to Open Enrollment section below elaborates. 5 3. As employees leave the organization a. Ensure Employment End dates are updated appropriately When 1095 s are generated, the dates to use to identify Employment End can be defined (similarly to the way they can be defined for the Start date). It should be ensured that these dates are maintained appropriately when employees leave the organization to allow for proper determination of employment periods during 1095 generation. 4. As employees change positions within organization a. Add new ACA Period Records (or update existing ACA Period Records) as necessary to track Full Time status and enrollment If an employee changes positions in such a way that their Full Time status changes, this may necessitate their being offered insurance (or an existing offer being revoked). New ACA Period Records can be used to track these changes and their consequences appropriately. 5. As employees have Life Events a. Ensure that Employee Coverage Dates are updated More information on this process can be found in the corresponding section under the Prior to Open Enrollment section below. b. Ensure Employee Dependents records are updated appropriately As with open enrollment changes, the Inactivate option can be used when posting Life Event changes to ensure that existing information remains in the system appropriately for future reporting. Prior to Open Enrollment The following procedures should be run at the end of the Standard Measurement Period that precedes Open Enrollment. The Affordable Care Act - Tracking Measurement Periods and Reporting on Hours Worked document on the Knowledge Base (as well as the July and August 2015 webinars in the Additional Resources section of the ACA Wiki) contains more information, detail, and examples of how to complete these steps. Steps that maybe need to be completed include: 1. Generate new Standard Records At this time, new Standard records should be generated. These records will define the next Measurement Period starting subsequent to the end of the one currently being evaluated. a. Ideal timing for this is at start of coming Measurement Period i. If Standard measurement period starts 10/15, generate on or around 10/15 ii. This allows generation of records for only active employees Only employees who are currently employed need to have records for the coming Standard Measurement Period. Timing this generation now allows for 6 only records for relevant employees to be created, and limits the need for manual maintenance. iii. Generated records should have a Full Time designation suitable for easy reporting Employees who can be definitively said to be Full Time can have that status, and similarly employees who can be definitively said to be Part Time can have that status. Employees who work a Variable schedule (who will need to have their time evaluated at the end of the coming Measurement Period) would best be initially labeled as having an Undefined Status. This will allow for efficient reporting (as reporting can then be limited to only employees who do actually need their Hours Worked evaluated). b. Determine who was Full Time (and therefore who needs to be offered insurance) The Hours Worked report can be leveraged for this. This report shows hours worked under specified pay codes during a given Measurement Period (as identified by employee s ACA Period Records). According to ACA rules, employees qualify as Full Time if they worked an average of 30 hours per week or 130 hours per month over the Measurement Period c. Use the preceding evaluation to update any Undefined ACA Period Records to have the correct Full Time designation. 2. Offer Insurance to those who are eligible a. Offers should be made to at least to all employees who qualified as Full Time. The designation that was entered into ACA Period Records in the previous step can be leveraged for this. b. Indicate offers made on ACA Period Records Once it is determined who needs to be offered insurance, these offers can be indicated on the corresponding ACA Period Records. The Importing Period Records and Coverage Offered Flag document on the Knowledge Base has more detailed information on and examples of this process. 3. Enroll employees in Insurance a. Update Employee Coverage Dates with enrollment data This can be done at this time via import, or dates entered separately into Employee Deductions can be synchronized. The Maintaining Employee Coverage Dates document on the Knowledge Base has information on this process. 4. Add or Update Employee Dependents records as appropriate If using Benefits Enrollment, the option to Inactivate deduction and dependent data can be used (instead of the Delete option) to append new information while leaving existing information in the system for later reporting. 7 At the End of the Calendar Year Reporting 1. If desired, prompt employees to change or confirm their 1095 delivery method Mass s can be used to prompt employees to check their 1095 delivery settings. Employees can opt to have their forms physically or electronically delivered electronic delivery being completed either via or via Employee Self Service. 2. Review ACA Period Records for accuracy If maintenance has been completed regularly, this step may be unnecessary. 3. Ensure all data in the system is correct prior to 1095 generation The 1095 generation process will delete any existing data for the reporting year and form type being generated. This means that (if at all possible) all data should be correct and all generation levels should be created and finalized prior to 1095 generation taking place. The Generating and Maintaining 1095 Records document on the Knowledge Base has detailed information on this process. 4. Proof generated forms for accuracy This step is mostly to ensure that the generation settings were correct, and there were not any unrecognized flaws in the underlying data. If forms are found to be incorrect in a way that can be rectified by changing underlying data or adjusting generation settings, these changes can be made and 1095 forms can be regenerated to correct these issues. 5. Make any manual adjustments to 1095 forms as necessary There are some scenarios that cannot be accounted for with existing data
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