Affordable Care Act Employer Reporting Administration

The Seneca Group is a licensed and insured third party administrator (TPA) that has been providing self-funded, split-funded, flexible spending account, and Health Reimbursement Arrangement (HRA) administration since 2006.

Schedule a Consultation

Affordable Care Act Employer Reporting Administration

The Seneca Group is a licensed and insured third party administrator (TPA) that has been providing self-funded, split-funded, flexible spending account, and Health Reimbursement Arrangement (HRA) administration since 2006.

Schedule a Free Consultation >

Affordable Care Act Employer Reporting (Code §6056) Administration

Health care reform adds a number of reporting obligations for employers, insurers, and health plans. It requires certain employers to report to the IRS when they offer their full-time employees and their employees’ dependents the opportunity to enroll in “minimum essential coverage” under an eligible employer-sponsored plan and to provide certain other information to the IRS.

An applicable large employer must prepare separate information returns for individuals, furnish the individuals with copies of the information returns (or a substitute statement), and use a single transmittal form to file individual information returns with the IRS.

Regulations require a separate return for each individual employee on Form 1095-C, or another form the IRS designates, or on a substitute form. The information returns are to be submitted to the IRS with a transmittal form, Form 1094-C. Each Form 1095-C and the transmittal Form 1094-C will together constitute an information return to be filed with the Internal Revenue Service.

Electronic filing is required by applicable large-employer members who are high-volume filers (those who file at least 250 returns under Code § 6056).

How will it impact your organization?

Employer responsibilities under the Affordable Care Act increased significantly January 1st 2015. At that time, applicable large employers should have evaluated beneficial IRS Safe Harbors and established a Measurement Period, Administrative Period, and Stability period to provide clear and accurate reporting of full-time employees that are covered under the Act.

Applicable large employers must also track and report to the IRS those employees who have exceeded 130 hours of service for each calendar month starting January 1st 2015. Failure to identify and offer health coverage to at least 95% of full-time qualified employees can result in fines of as much as $2,000 per full-time employee per year to the applicable large employer.

The Seneca Group §6056 Administration

The Seneca Group provides comprehensive tracking, administration and reporting of all § 6056 requirements. Our customized approach has been analyzed and implemented by more than 40 large public sector employers with strict procurement requirements. Our methods and administration provide our clients with a clear understanding of their responsibilities and a means to meet the requirements under the Act.

§6065 Administration Components

The Seneca Group §6056 compliance and administration services include three components:

Initial Evaluation: The first step in compliance is to establish a baseline to identify areas of deficiency. This is accomplished by analyzing the employer’s historical payroll data (minimum of 12 months) to determine the hours of service for each W2 employee during each calendar month. Our analysis determines hours of service using the IRS approved “Actual Hours,” “Days worked,” or “Weeks worked” equivalency methods. This data, combined with a list of employees who were offered “Minimum Essential Health Coverage,” will provide a clear and precise report of deficiency. The Initial Evaluation is accomplished through utilizing payroll history reports available through the employer’s existing payroll vendor/application. The Seneca Group can work with any payroll vendor that provides detailed payroll history reporting in Excel, text, or tab delimited files.
Baseline Measurement Period Analysis: In this analysis, the Seneca Group provides IRS Safe Harbor recommendations for the optimal measurement period, administrative period, and stability period for ongoing employees, as well as seasonable and variable-hour employees. Once the periods are established, The Seneca Group communicates the significance to employees and staff.
Ongoing Tracking and Reporting: Upon completion of the Initial Evaluation and Baseline Measurement Period Analysis, The Seneca Group offers continued employee tracking and reporting for all ongoing, new, seasonable, and variable-hour employees. These periodic reports identify employees and areas where adjustments in hours are needed to ensure continued compliance with employer-shared savings responsibility under health care reform and the resulting IRS reporting requirement under §6056.