Mary Jo Colligan
Phone: 716-675-2100 ext. 22
- Print & mail IRS Form 1095 to employees
- E-file IRS Form 1094 with the IRS
Our system will generate the 1095’s for all employees who were eligible for an offer of coverage in an employer sponsored health plan during the calendar year, regardless of whether an offer was actually made. This includes all ACA full-time employees and all Variable Hour employees who have completed their measurement period and were determined to be FT eligible status, as well as retirees and COBRA participants. We will also collect the data for Part III of the 1095-C form for self-insured plans.
While many payroll firms and ACA compliance services providing 1095 filing are no longer taking additional customers, The Walsh Group has no deadline. However, it is prudent to begin the data collection process as soon as possible and we recommend filing by January 20th.
NOTE: Submissions to file the 1095 may be completed up until 8:00 PM EST on February 1, 2016
Key Filing Requirements
For the most part, filing the 1095 and 1094 is a data collection exercise; however, the items below represent the more difficult components that must be completed and will most likely pose challenges for companies:
- 1095-C Line 14: One of 9 codes is entered to track the offer to health insurance for each employee: (no offer, affordable offer, employee only offer, etc.)
- 1095-C Line 16: If applicable, one of 9 codes is entered for each month providing an explanation why penalty isn’t applicable (not employed, in waiting/assessment period, enrolled, qualified for an affordability safe harbor, etc.)
- 1094-C: This form acts as a cover sheet for all the 1095-C filed, provides the employer an opportunity to certify eligibility for transition relief from assessment, and contains the count of 1095-C’s filed and the number of ALE employees employed each month.
What is involved in generating a 1094 and 1095 with The Walsh Group?
- Importing the hours to determine which employees are full-time.
- Import actual enrollment from the health insurance carrier (This data is used to determine the code for Line 16 and Part III for self-funded plans).
- Complete the company information: This step includes the collection of the company information printed in the form such as the address, control group information and transition relief.
- Importing & categorizing employees including the ACA classification of Full-Time Eligible, Part-Time Ineligible, and Variable Hour.
- Create the medical plans (This data is used to determine the correct code for Line 14 and Line 16).
- Establish the measurement and administrative periods to allow the software to determine the codes for Line 14 and Line 16.
The Walsh Group will provide you with a list of required information to create the forms. You supply the information and we do the work.
The advantages of The Walsh Group’s ACA solution
- Cost effective filing solution for 1095s: The Walsh Group’s fees are low.
- Data collection: We will help companies collect the necessary information for the IRS 1095/1094 Reporting. What sets us apart from other ACA solutions is that we aren’t making you complete monthly eligibility calculations yourself. Instead, we have turned ACA compliance into simple data inputs so that we can do the calculations for you!
- Control: You can fill out the forms on your schedule.
- Streamline the eligibility determination for part-time employees: Manage employee eligibility by tracking the hours worked of the non-full time employees to determine the appropriate measurement dates and eligibility associated with new hire and standard stability periods.
Does a company have to use The Walsh Group’s benefit administration solution?
No. Our system can still be used to file the 1094 and 1095. Clients not using The Walsh Group’s benefit administration system will need to import employee and dependent enrollments, including historical enrollments. Building enrollment history will be the most difficult step for companies who are not using a benefit administration system. For example, an employee that was eligible but not enrolled in health insurance that has a life event will need to track the date of the life event so the proper code can be entered on Line 16 for each month.
IMPORTANT: In order to correctly assemble the enrollment history, enrollment from the insurance carrier must be imported in sequence. For example, the enrollment for January 2015 must be imported before enrollment for February 2015. This is necessary to eliminate the possibility of overlapping enrollment periods.
Has The Walsh Group ever e-filed with the IRS?
No, that’s why we partnered with Nelco Solutions to electronically transmit, print AND mail 1094 and 1095 forms. Nelco currently e-files over 5 million W2’s and 1099’s annually and has been performing these service for over 20 years.
Who has to file?
The Affordable Care Act requires certain employers (those with 50+ employees) to offer affordable coverage to their employees. But which employees need to be offered coverage? We are here to help you define your employees, track their hours, and stay in compliance with the regulations put in place by the Affordable Care Act.
What are the fines for not filing?
After December 31st, 2015, Applicable Large Employers that fail to file an information return and do not provide the appropriate form to all full-time employees could be subject to a penalty up to $250 per form, with a maximum annual penalty of $3 million.
What are the filing deadlines?
The 1095 needs to be distributed to employees by February 1, 2016. The 1094 & 1095 need to be filed with the IRS by February 29, 2016 if filing by paper or March 31, 2016 if filing electronically.
Does the software support Variable Hour tracking?
Yes. The variable hour tracking feature enables companies to set-up initial measurement periods, stability periods and administrative periods for new and existing employees. The software streamlines eligibility tracking for part-time employees.
The software permits employers to track hours on a monthly basis (130 hours). Users are able to import hours for employees and the system automatically tracks hours worked during the measurement period for new hires and ongoing employees. Employers have the ability to use the variable hour tracking even if they are not using our platform to enroll in benefits.
The Nuts & Bolts of ACA Eligibility:
All full-time employees who are expected to regularly work > 30 hours per week must be offered affordable coverage. Affordable means the cost of the insurance is less than 9.5% of their income.
Companies will need to track the hours of employees that are expected to regularly work less than 30 hours a week to determine if they should be offered coverage. The federal government has prescribed maximum waiting periods for employees and various measurement requirements, but in summary, employees who average > 130 hours a month over a prescribed measurement period must be offered affordable health coverage.
How do the Measurement Periods work?
The measurement period is the period of time hours are tracked to determine if an employee has worked on average more than 130 hours per month. The minimum measurement period is 3 months and the maximum is 12 months. When setting up measurement periods, it is important to note that companies set up two different groupings. The first group is new-hires for their initial measurement period which outlines the new hire periods and determines how long they are a variable hour employee and how long the administrative period is before they are offered new-hire
coverage. Once an employee has been employed for a full measurement period, a new hire will graduate into their standard measurement and stability periods and all the employees will be measured together. It is recommended to use the month of your health insurance renewal as the start of your stability period. The eligibility period and measurement periods only apply to variable hour employees.
Once the measurement period has finished, the IRS gives employers some time to review the hours an employee worked to determine if they should be offered coverage. This period is call the Administrative Periods. The length of the administrative period cannot be longer than 90 days and the days may be allocated before or after the measurement period.
The Affordability Calculator uses the Rate of Pay Safe Harbor to determine if the cost of coverage for an employee is affordable. We do this by selecting an employer’s low cost plan and determining if any employee cost is greater than 9.5% of their salary.
The ALE Calculator helps to determine how many full time employees were employed in a given
month. We make this determination using the following calculation:
- Full Time Employees +
- Full Time Equivalents –
- Statutory Exclusions =
- Total Full Time employees
Full Time Equivalent employees are determined by the total hours worked by non-full time employees (meaning Variable Hour and Part-time employees) divided by 120 for each month.
If you have any questions, or would like more information about any of the topics discussed above, please click the button, or give us a call at (716) 675-2100 to speak to a Walsh Group representative.