troy holland - logan county slide deck.pdfdisclaimer •the information in this presentation is...

Troy Holland

Paylocity Senior District Sales Manager

[email protected]

614-706-8709

Disclaimer

• The information in this presentation is based on IRS guidance and form instructions as of 2/21/2015

• It may subject to further regulatory clarification

• This presentation is not professional, legal, tax, accounting or benefit advice. You are encouraged to engage a professional in these areas

• This presentation may not be appropriate for all employers. Some employers, such as those with multi-employer plans, government entities and educational institutions, may have additional scenarios not covered in this presentation

ACA Dashboard & Analytics

Paylocity’s innovative ACA Dashboard and comprehensive analytics allows companies to easily manage ACA complexity.

Armed with Paylocity’s ACA tools employers and their trusted brokers have access to real time data for powerful strategic data driven decisions.

Affordable Health Care Act

COMPLIANCE

It is constantly evolving … how has your application adapted?

74% Of companies

biggest concern is that

Healthcare Reform is

constantly evolving

Cryptic? We’ll sort it out!

6055

6056

1094-C 1095-C

MEC MV

1A 1B

1C

1D

1E

1F 2A 2B

2C

2D

2E

4980(h)

Shared Responsibility

Requires…

large employers must

offer an affordable

health plan providing

minimum value to a

percentage of all full-

time employees or face

a penalty.

Refresh me on

affordability…

Affordability safe harbors

• Box 1 W-2 Wages

• Federal Poverty

Level (Single)

• Full-time equivalent

wages – (Employee

Rate x 130 hours

per month )

Cost of single

coverage in the

least expensive

plan providing

minimum

essential

coverage

cannot exceed

9.5% of…

The affordability test means single coverage in an employer’s least expensive

plan that provides minimum essential coverage cannot exceed 9.5% of

“income.” There are multiple safe harbor methods to determine “income” for

this test:

How do I know who is

“full-time”?

Who is full-time?

Under ACA, an employee is considered full-time of they work on average 30

hours per week or 130 hours per month.

If, by the nature of the employees position, he or she is reasonably

expected to work on average 30 hours per week or 130 hours per month,

they should be classified as full-time for benefit eligibility purposes and

must be offered benefits subject to a maximum 90-day waiting period

If the employee is definitely not full-time, there is no requirement to offer

coverage

If it is unknown whether the employee is full-time or part-time, they are

known as a variable hour employee

What is a “measurement

period”?

A measurement period is a company selected 3-12 month timeframe that is

used to determine whether a variable-hour employee is full-time for benefit

eligibility.

If the employee averages 30 hours per week or 130 hours per month or more

in this period they are considered full-time employees and must be offered

insurance coverage.

What is a “measurement

period”? There are two types of measurement periods.

The standard measurement period is applied to all employees in a group

(more on that later) and begins and ends on the same date for all employees

in the group.

The initial measurement period is applied per newly hired variable hour

employee and generally coincides with the beginning of employment.

What is a “stability period”? If they are determined to be full-time in the measurement period, their full-

time status and eligibility for benefits is locked in for the following stability

period.

In general, the stability period is the same length as the measurement

period, but cannot be less than 6 months long.

What is an ‘administrative

period’? Employers may elect to use an administrative period up to 90 days

between the measurement period and the stability period to determine who

is eligible for coverage and to notify and enroll employees. To prevent gaps

in coverage, this must overlap with the prior stability period.

Examples

Special rules for new hires For newly hired variable-hour employees, the initial measurement period

combined with the administrative cannot extend beyond

“the last day of the first calendar month beginning on or after the one-year

anniversary of the employee’s start date”





Mar. April May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. April May

Hired

March 15 Anniversary

End of Measurement

and Admin Period

Coverage

Begins

Denise F. Hired March 15





Mar. April May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. April May

Hired

March 15 Anniversary

End of Measurement

and Admin Period

Coverage

Begins

Denise F. Hired March 15

Employers with an

11 or 12 month

measurement period

cannot use a 90 day

administrative period

with new hires

ACA Reporting

Requirements

Why is reporting required? The filing of informational returns to support enforcement of the individual

mandate and employer mandate are authorized by section 6055 and 6056 of

the Internal Revenue Code

Section 6055 Section 6055 reporting is required by “providers of coverage”. It details all the

individuals covered by that provider and which months in the calendar year

they were covered. This information is instrumental to the IRS to administer

the individual mandate.

“Providers of coverage” includes private insurers (think BCBS, Kaiser etc.)

public programs (such as VA, Medicare and SCHIP programs).

Employers that self-insure are ALSO considered “providers of coverage”.

As a convenience to employers that self –insure, the information required by

this section can be combined with the reporting required under section 6056.

Section 6056 Section 6056 reporting has a number of objectives:

• It provides the IRS with the data needed to administer the employer

shared responsibility provisions of the ACA

• It provides employees with new data needed to determine eligibility for

premium tax credits when purchasing exchange coverage

• For employers with a self-insured offering, the associated return can

also include the “who’s covered” information otherwise required by

section 6055

Section 6056 Section 6056 reporting introduces two new tax forms to the employer:

• 1095-C is a new tax document the employer must issue to the

employee and file with the IRS outlining details of the coverage offered

by the employer, and the status of the employer’s offer of coverage to

that employee by month.

• The 1095-C is issued only to employees that were full-time for one or

more month in the previous calendar year.

• This document is unique to each employee (just like a W-2 is)

• This document must be furnished to each employee by January 31 for

the previous year.

• Employers issuing more than 250 1095-Cs must file their IRS copies

electronically

Section 6056 Section 6056 reporting introduces two new tax forms to the employer:

• 1094-C is a what is called a “transmittal”. It sums up the information

from the individual 1095-C forms (much like the W-3 is a transmittal of

all the employer’s form W-2s)

• It also provides employer-specific details such as the number of full-

time employees and total employees per month, and also whether the

employer is eligible for other relief criteria

• This filing is due to the IRS by March 31 for the previous year’s

information if filing electronically (February 28th if filing on paper)

Which employers must file?

• All applicable large employers (50 or more full-time employees and

equivalents employed per month on average in a calendar year) must file

forms 1094-C and 1095-C.

• This must be done regardless of whether the employer offers insurance

coverage.

What about employers with < 100 FTEs?

The IRS introduced transition relief for 2015 which excuses penalties for

employers with fewer than 100 full-time employees and equivalents. Even

through these employers would not face a penalty for failing to offer coverage

(or for offering unaffordable coverage) this transition relief is NOT automatic.

These employers must still comply with the aforementioned reporting

requirements.

ALE Group

Reporting

Considerations

For ALE Groups

• An employer can choose to file multiple 1094-Cs (one for each

division for example). If they do this, ONE of the 1094-Cs must be

designated the authoritative transmittal.

• The authoritative transmittal reports aggregate information for parts

II-IV of the 1094-C (total 1095-Cs, monthly employee counts)

• An employee that works for multiple employers in the same ALE

group must be issued a separate 1095-C from each employer.

A look at the final

form…

Form 1095-C

Identifying information

for the employee and

employer

Form 1095-C

Line 14 identifies if there was an offer

of coverage, whether it provides

minimum essential coverage, and

who it covers

Form 1095-C

Line 14 “Code Series 1” for each

month…

• If the employee wasn’t offered coverage for a month whatever the reason – code 1H

• If the employee was offered MEC coverage providing minimum value-

– Employee only – code 1B

– Employee + Dependents – code 1C

– Employee + Spouse – code 1D

– Employee + Spouse + Dependents – code 1E

• If the employee was offered MEC coverage NOT providing minimum value – code 1F

Line 15 shows the monthly employee

premium for single coverage in the

least expensive minimum essential

coverage plan.

Form 1095-C

ONLY complete if the corresponding

line 14 code is 1B, 1C, 1D or 1E

Form 1095-C

Line 16 identifies

employer safe harbors

for coverage and

affordability

Form 1095-C

Line 16 “Code Series 2” for each

month…

• If the employee was enrolled in coverage – code 2C

• If the employee was not employed in the month – code 2A

• If the employee was not a full-time employee – code 2B

• If a variable-hour employee is in their initial measurement

or administrative period – code 2D

• If the employee is eligible but in a waiting period – code 2D

• If the employee was hired other than the 1st of the month –

2D

• If the employer used an affordability safe harbor (and no

other codes apply)

2F – W-2 method, 2G – Federal Poverty Level method, 2H – Rate of Pay

method

“Covered Individuals”

information for

employees enrolled in

self-insured coverage

Form 1095-C

1095-C

Examples

Blue Sun Corporation

• Offers affordable MEC, MV coverage to all full-time employees only.

New hires are eligible for coverage the first of the month after 30

days. The lowest cost option is a HDHP plan costing $55.85 per

month

• Adelei Niska is a newly hired (On February 5, 2015) full-time

employee that enrolls himself only in a self-insured PPO plan for

$88.25 a month.


Adelei was hired in February, and with his

waiting period, coverage is not offered until

April1, so code 1H signifies that no coverage

was offered.


Even though coverage was not offered for Jan-March, the reason

for not offering coverage changed from ‘he wasn’t employed in this

month’ (2A) to ‘he is in his waiting period…aka a “limited non-

assessment period”’ (2D)


Even though Adelei enrolled in a more expensive PPO plan option

at $88.25 a month, the 1095-C line 15 still reflects the cost of single

coverage in the least expensive MEC plan offered (a HDHP in this

case) priced at $55.85


Because the plan Adelei actually enrolled in was self-insured, Part

III is required to be completed for each individual covered under the

plan (just him in this example)

Barron’s Burger Barn

• Offers affordable MEC, providing MV to the employee and

dependents only (not to spouses). Variable hour employees are

subject to a 12 month measurement period. Barron’s Burger Barn

uses the rate-of-pay affordability safe harbor. The cost of single-

coverage in the most affordable plan option is $110.00

• Robert Belcher Jr. is a variable hour employee hired on February 5,

2014. His initial measurement period and initial administrative

period end March 31, 2015. He is offered MEC coverage but

declines to enroll.


Because Robert was in his initial

measurement or initial administrative

period, we use code 1H to signify that

he was not yet offered coverage


Line 16 clarifies that for those months, the reason he was

not offered coverage was because he was in a “Limited

non-assessment period” (which an initial measurement

and administrative period is)


Since Robert turns out to be full-time as a result of

the initial period, he is offered up to

employee+dependent coverage (code 1C)


The cost of single coverage in the least expensive

plan offered is $110.00 a month and is reflected in

line 15


Barron’s Burger Barn has elected to use the rate of pay affordability safe

harbor (indicated by code 2H) and that is used here since no other 2-series

code trumps it. Had Robert actually enrolled, 2C (employee enrolled in

coverage offered) would take precedence

And now the

transmittal…


for the employer


for employer groups

Certifications of

eligibility

Full-time and total

employee counts by

month for the ALE

member

50-99 FTE Code A

100+ FTE Cod B

Listing of related companies in the

aggregated employer group

TECHNOLOGY AND ACA COMPLIANCE

• FTE Calculators

• Affordability Modeling

• Classify Employees: FT/PT/Variable Hour/Seasonal

• Track Measurement/Administrative/Stability Periods

• Average Hour Reporting : Hours of Service

• Offer of Coverage/Cost of Coverage/Safe Harbor

• Calculate FT Employees and Total Employees

• Self-Insured: Track Spouse & Dependents/SS #

or DOB

• Self-Insured: Benefit Effective Dates for Spouse

and Dependents

Technology can eliminate the daily

management of ACA compliance; the

right tools will insulate you from

compliance issues

Technology That works for you

Payroll/HR

59

ACA COMPLIANCE TOOLS

tools are standard

60

Visualize FTE Count

to determine large

employer status

WHAT IS YOUR FTE COUNT?

Compliance Dashboard

Report ParametersDate Range January 2012 - December 2012

Select Dates by Period End

Group By cc1 (Division)

Select Hours by Code Group: Subject Hours

Salary Hours per Week 40

Month1 Month2 Month3 Month4 Month5 Month6 Month7 Month8 Month9 Month10 Month11 Month12

cc1 - 100

Salary Employee Count 12 12 12 13 13 12 11 11 10 14 14 16

Total Hours of Service 5680 5630 4945 5777 5245 4780 5500 5780 5980 5414 5778 5211

Subject Hours of Service 4560 4560 4200 4560 4560 4200 4150 4650 4800 4700 4225 4350

Hourly FTE Count 38 38 35 38 38 35 34 38 40 39 35 36

Total FTE count cc1 - 100 50 50 47 51 51 47 45 49 50 53 49 52

cc1 - 200




Hourly FTE Count 38 38 35 38 38 35 34 38 40 39 35 36

Total cc1 - 200 50 50 47 51 51 47 45 49 50 53 49 52

cc1 - 300




Hourly FTE Count 38 38 35 38 38 35 34 38 40 39 35 36

Total cc1 - 300 50 50 47 51 51 47 45 49 50 53 49 52

cc1 - 400




Hourly FTE Count 38 38 35 38 38 35 34 38 40 39 35 36

Total cc1 - 400 50 50 47 51 51 47 45 49 50 53 49 52

Total EE All Categories 200 200 188 204 204 188 180 196 200 212 196 208

Total Employees all months 2376

Month Count 12

Average Per Month 198

Hours Analysis Export

(Summary)

Summarize

detail by

applicable

employee

grouping

Total FTE count by

month average for

all months

Report that allows your

client to…

• Create an accurate FTE count over

a designated date range (summary

mode)

• Employee details of variable hours

that exceed the 30 hour average by

modeling different employee

groupings and look-back periods

(summary mode)

• Run on demand to see at any point

in a measurement period which

employees are exceeding a 30 hour

average (detail and summary

mode)

62

AFFORDABILITY MODELING

View ALL 3

Affordability Options

Report ParametersDate Range 1/1/2012-12/31/2012

Total Months 12

Group By cc1 (Division)

Affordability Threshold 9.50%

Annual FPL (Contiguous US) $11,490.00

Annual FPL (Alaska) $14,350.00

Annual FPL (Hawaii) $13,230.00

Safe Harbor Monthly

Plan Value $177.25

Employee Name Empl ID FT/PT Union cc1 cc2 cc3

Effective

Hourly

Rate State

W-2 Taxable Wages

Safe Harbor

W-2 Taxable Wages

FPL Percentage

Plan premium

W-2 Percentage

Hourly Rate

Safe Harbor Wages

Plan Premium

Hourly Rate

Percentage FPL Safe Harbor

Plan Premium FPL

Safe Harbor

Percentage

Adams, Marie 1 Regular Full-Time 100 1000 20 $11.75 IL $11,125.00 96.82% 19.12% $18,330.00 11.60% $11,490.00 18.51%

Alba, Emily 8 Variable Part-Time IBEW101 100 1000 20 $12.00 IL $13,464.00 117.18% 15.80% $18,720.00 11.36% $11,490.00 18.51%

Allerdyce, Sheppard 3 Variable Part-Time IBEW101 100 1000 20 $13.35 IL $12,212.00 106.28% 17.42% $20,826.00 10.21% $11,490.00 18.51%

Baez, Arnold 14 Regular Full-Time 100 1000 30 $9.11 IL $9,855.00 85.77% 21.58% $14,211.60 14.97% $11,490.00 18.51%

Barclay, Reginald 25 Regular Full-Time 200 2000 30 $10.77 IL $3,258.00 28.36% 65.29% $16,801.20 12.66% $11,490.00 18.51%

Bell, Darius 985 Regular Full-Time 200 2000 40 $8.55 IL $3,775.25 32.86% 56.34% $13,338.00 15.95% $11,490.00 18.51%

Cooper, Santana 13 Variable Part-Time 200 2000 40 $13.88 IL $11,775.25 102.48% 18.06% $21,652.80 9.82% $11,490.00 18.51%

Diallo, Adeola 22 Regular Full-Time 200 2000 40 $14.75 IL $19,852.50 172.78% 10.71% $23,010.00 9.24% $11,490.00 18.51%

Grey-Summer, Jean 75 Regular Full-Time 200 2000 50 $11.75 IL $3,877.22 33.74% 54.86% $18,330.00 11.60% $11,490.00 18.51%

Koenig, Saul 85 Regular Full-Time 400 4000 70 $12.00 IL $19,975.25 173.85% 10.65% $18,720.00 11.36% $11,490.00 18.51%

Liu, Marshall 62 Variable Part-Time IBEW101 400 4000 70 $13.35 FL $3,885.00 33.81% 54.75% $20,826.00 10.21% $11,490.00 18.51%

McTiernan, Abel 54 Regular Full-Time 400 4000 70 $9.11 FL $4,752.00 41.36% 44.76% $14,211.60 14.97% $11,490.00 18.51%

Metzger, Rachel 85 Regular Full-Time 400 4000 80 $10.77 FL $9,854.00 85.76% 21.59% $16,801.20 12.66% $11,490.00 18.51%

O'Hara, Blake 11 Variable Part-Time IBEW101 400 4000 80 $8.55 FL $5,217.00 45.40% 40.77% $13,338.00 15.95% $11,490.00 18.51%

Nguyen, Lori 10 Variable Part-Time IBEW101 650 6500 80 $13.88 FL $8,856.00 77.08% 24.02% $21,652.80 9.82% $11,490.00 18.51%

Lensherr, Erik 17 Variable Part-Time IBEW101 650 6500 90 $14.75 WA $9,212.00 80.17% 23.09% $23,010.00 9.24% $11,490.00 18.51%

Sahay, Lester 33 Regular Full-Time 650 6500 90 $11.75 WA $11,425.00 99.43% 18.62% $18,330.00 11.60% $11,490.00 18.51%

Volkoff, Alex 44 Regular Full-Time 650 6500 90 $12.00 AK $14,256.00 99.34% 14.92% $18,720.00 11.36% $14,350.00 14.82%

Pierpoint, Morgan 20 Variable Part-Time 650 6500 75 $13.35 HI $9,920.00 74.98% 21.44% $20,826.00 10.21% $13,230.00 16.08%

Total Employees above affordability threshold 14 12 14

Analyze all safe-harbor

methods on one report

Modeling Medical Plan Affordability

Run-time parameters

capture static values to

conduct analysis

Identify employees exceeding

affordability threshold

64

Configure unique rules

including safe harbor monthly

plan premiums

HOW IS YOUR SYSTEM STORING PLAN

VALUES?

65

Configure rules for new hires

and ongoing staff

measurement periods

MANAGING MEASUREMENT PERIODS:

INITIAL AND STANDARD Compliance

Dashboard

66

Administrative period rules

enforced for new hires and

ongoing employees

CONFIGURE SYSTEM FOR DIFFERENT

ADMINISTRATIVE PERIODS Dashboard

67

View eligibility for

variable hour

employees based on

hours worked

HOW DO YOU KNOW WHO SHOULD

BE ELIGIBLE FOR BENEFITS?CA C

Easily filter to see

employees that should

be full-time based on

average hours that are

not classified as such

Paylocity

Equipped

With Unique

Solutions

Hours Analysis Export (Detail)

Report ParametersDate Range January 2012 - December 2012

Select Dates by Period End

Group By Employee Detail

Select Hours by Code Group: Subject Hours

Salary Hours per Week 40

Average Min Average Max

Employee Name Employee ID FT/PT Union cc1 cc2 cc3 Pay Type State Month 1 Month 2 Month 3

Total Subject

Hours

Average Hours

per Week Variance

Adams, Marie 1 Regular Full-Time 100 1000 20 Salary IL 80 80 80 240 21.82 (8.18)

Alba, Emily 8 Variable Part-Time IBEW101 100 1000 20 Hourly IL 80 80 80 240 21.82 (8.18)

Allerdyce, Sheppard 3 Variable Part-Time IBEW101 100 1000 20 Hourly IL 163 163 163 489 44.45 14.45

Baez, Arnold 14 Regular Full-Time 100 1000 30 Salary IL 80 80 80 240 21.82 (8.18)

Barclay, Reginald 25 Regular Full-Time 200 2000 30 Salary IL 80 80 80 240 21.82 (8.18)

Bell, Darius 985 Regular Full-Time 200 2000 40 Salary IL 80 80 80 240 21.82 (8.18)

Cooper, Santana 13 Variable Part-Time 200 2000 40 Hourly IL 90 90 90 270 24.55 (5.45)

Diallo, Adeola 22 Regular Full-Time 200 2000 40 Salary IL 80 80 80 240 21.82 (8.18)

Grey-Summer, Jean 75 Regular Full-Time 200 2000 50 Salary IL 80 80 80 240 21.82 (8.18)

Koenig, Saul 85 Regular Full-Time 400 4000 70 Salary IL 80 80 80 240 21.82 (8.18)

Liu, Marshall 62 Variable Part-Time IBEW101 400 4000 70 Hourly FL 122 122 122 366 33.27 3.27

McTiernan, Abel 54 Regular Full-Time 400 4000 70 Salary FL 80 80 80 240 21.82 (8.18)

Metzger, Rachel 85 Regular Full-Time 400 4000 80 Salary FL 80 80 80 240 21.82 (8.18)

O'Hara, Blake 11 Variable Part-Time IBEW101 400 4000 80 Hourly FL 125 125 125 375 34.09 4.09

Nguyen, Lori 10 Variable Part-Time IBEW101 650 6500 80 Hourly FL 80 80 80 240 21.82 (8.18)

Lensherr, Erik 17 Variable Part-Time IBEW101 650 6500 90 Hourly WA 75 75 75 225 20.45 (9.55)

Sahay, Lester 33 Regular Full-Time 650 6500 90 Salary WA 80 80 80 240 21.82 (8.18)

Volkoff, Alex 44 Regular Full-Time 650 6500 90 Salary WA 80 80 80 240 21.82 (8.18)

Pierpoint, Morgan 20 Variable Part-Time 650 6500 75 Hourly WA 130 130 130 390 35.45 5.45

Runtime parameters to assume hours

for salaried employees and filter for a

range of average hours Include data for different

employee group types

Make data driven, informed decisions

Summarize average hours per

month, and per week for report

period

69

View initial and

standard

measurement

periods

simultaneously

HOW EASY IS IT TO REVIEW OVERLAPPING

MEASUREMENT PERIODS?oiancd

70

See detail history of

recorded hours

without having to run

reports

CAN YOU REVIEW HOURS HISTORY IN THE

EMPLOYEE RECORD?

OFFER OF COVERAGE CODES

View Line 14 of the

1095-C Offer of

Coverage Codes

View Line 15 of the

1095-C Cost of

Single Premium

Coverage

COST OF SINGLE PREMIUM COVERAGE

View Line 16 of the

1095-C Safe Harbor

Codes

SAFE HARBOR CODES

Time to EVALUATE. Is your current application ready,

robust and keeping ACA simple?

• Will you file our 1095-C/1094-Cs?

• SHOW me where I can access the IRS codes for lines 14 & 16 of the 1095-C?

• SHOW me the report that calculates FTEs by month and determines my ESR status?

• SHOW me the report that measures affordability across ALL 3 Safe Harbors?

• SHOW me how your system tracks standard AND initial measurement periods?

• SHOW me how your system tracks administrative and stability periods?

• Is there a charge for my broker to have access?

• If the IRS has questions about my 1095-C/1094-C filings, will you advocate on our behalf?

• If you don’t have a solution today, who is going to go back for every month of the calendar year and update the needed information for EVERY employee?

Robust solutions that keep your job simple

That works for you TECHNOLOGY

Remember the lesson

“Don’t follow the crowd”

…we do

As a child you may remember being asked, “Would you

jump off a bridge if everyone else did?” This statement

was usually the response you received when wanting to

do what everyone else was doing. It was meant to get

you thinking. A metaphor for “use your head better”.

At Paylocity we applied that simple lesson not to follow

the crowd and redefined the world of payroll and HR.

We strive to be different-innovators in our industry from

our technology and software development to our

customer service expectations. We’re proud to be

different because different is what companies needed.

Paylocity is built from forward thinking leaders, loyal

customers, innovative software, one-of-a kind solutions

and our clients’ voices.

At Paylocity we remembered the lessons we learned as

children and made it a point to not follow the crowd.

Discover the Paylocity

DIFFERENCE

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