Employer Health Care Arrangements

In order to be compliant with the new Affordable Care Act laws, many employers had to begin offering health insurance that met the minimum essential coverage (MEC) requirements to their full-time employees. In lieu of offering traditional insurance, some employers instead came up with employer health care arrangements wherein their employees’ coverage was taken care of, just not in the traditional sense of providing self- or fully-insured plans.

Unfortunately, employer health care arrangements aren’t what the writers of the ACA had in mind when they said, “provide coverage.” Here are a few questions we’ve received regarding these employer health care arrangements:

What if I don’t establish a health insurance plan for my employees but instead reimburse them for the premiums they pay for their own qualified health insurance?
According to the IRS, this sort of arrangement is considered an employer payment plan. Because employer payment plans generally don’t include an arrangement through which the employee may have an after-tax amount applied toward their health coverage (or have the opportunity to take that amount as a cash compensation).

The IRS notice goes on to explain that these employer payment plans are considered to be group health plans subject to market reforms, meaning that they cannot be integrated with individual policies to satisfy the market reforms. If the arrangement cannot satisfy the market reforms, you could be subject to $100/day excise tax per applicable employee.

Is there any transition relief for employers who did offer their employees health coverage through arrangements like an employer payment plan?
Yes. Last February, the IRS issued this notice, which provides transition relief from the excise tax described above. The transition relief applies to employer healthcare arrangements that are:

• employer payment plans sponsored by an employer who is not an Applicable Large Employer (ALE)
• S corporation healthcare arrangements for 2% shareholder-employees
• Medicare premium reimbursement arrangements
• TRICARE-related health reimbursement arrangements (HRAs)

E-filing with ExpressIRSForms
The deadline to e-file your 2015 ACA return was yesterday (June 30). However, if you haven’t filed yet, you can still do so through your ExpressIRSForms account. For questions or help getting started, give us a call at (704) 684-4751 or send us a live chat or an email to support@ExpressIRSForms.com.

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Health Care Coverage: Self-Insured v. Fully-Insured

There are two main types of health plan employers need to consider when setting up the coverage they’ll over their employees: self-insured (or self-funded) and fully-insured.

The big difference between the two is in self-insured health care coverage plans, the employer assumes financial risk for the employees’ benefits, paying the claims out of pocket rather than a fixed premium to the insurance carrier, like fully-funded plan providers do. Read on to learn a little more about the more specific differences between the two plans.

Self-Insured Plans
Rather than purchasing a fully-insured plan from an insurance carrier, employers who choose a self-insured plan are opting to operate their own health plan. These employers are generally larger ones and benefit from this type of plan because it allows them to save on the premiums insurance companies charge for fully-funded plans. It can be risky, though, because the employer will end up paying more out of pocket if more claims than are expected need to be paid.

Fully-Insured Plans
A fully-insured health plan is the more traditional option for employers, especially if you’re on the smaller end of the ALE scale. For this type of plan, the employer agrees on a fixed premium each year, paid to the insurance company based on the amount of employees the employer has enrolled. The insurance carrier will then pay any health care claims throughout the year, and employees are responsible for any deductibles or co-pays required for services.

Now that you’ve got your ACA-compliant health care coverage, do you know how you’re filing your forms? ExpressIRSForms now offers e-filing for ACA Forms 1094 and 1095, or you can check out ExpressACAForms for our full-service e-filing option.

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ACA Form 1094-C Certification of Eligibility

Applicable Large Employers (ALEs) may be eligible for relief from certain requirements as they transition to payroll and benefits systems that meet Affordable Care Act standards.

In order to indicate to the IRS that they were eligible for this relief on their 2015 ACA return, ALEs will check a box indicating which Certification of Eligibility they qualified for on Line 22 of Form 1094-C. In this post, we’ve compiled a list of the four methods of relief found on Line 22 and how eligibility for them can be met.

Qualifying Offer Method (Box A)
A Qualifying Offer applies if you (the ALE) made a minimum value (MV) offer to at least one full-time employee for each month of the year they were full-time. Additionally, you would’ve needed to offer minimum essential coverage (MEC) to the employee’s spouse and dependent(s) that cost them no more than 9.5% of the federal poverty line (FPL).

Qualifying Offer Method Transition Relief (Box B)
This method of relief is available for the 2015 tax year only. An ALE must have made a qualifying offer (as described above) to 70% of their full-time employees for one or more months of the year. Filing Bonus: If you check Box A or B on your 1094-C, you can use a simplified, generic Form 1095-C instead of individual forms.

Section 4980H Transition Relief (Box C)
Section 4980H relief has two types, depending on just how LE of an ALE you are:

• Option 1: ALEs with 50-99 FT employees are eligible if they didn’t reduce their workforce or their employees’ hours of work in order to meet ACA compliance requirements. They also can’t have reduced or eliminated coverage offered.
• Option 2: ALEs with 100+ FT employees with this eligibility are subject to assessable penalty reduced by 80 employees instead of the standard 30.

98% Offer Method (Box D)
ALEs are eligible to check this box if they made an offer of affordable coverage (that meets MV qualifications) for every month of the year to at least 98% of the employees for whom they’re filing 1095-C forms. These can be enrolled full-time and part-time employees.

If you’re eligible for one of these relief methods, be sure to indicate so on your Form 1094-C. ExpressIRSForms can help prompt you to do this when you e-file your ACA Forms through our system, saving you from making any filing errors. For help getting started, you can call our support team in Rock Hill, SC at (704) 684-4751 Monday through Friday, 9:00 a.m. to 6:00 p.m. EDT. After hours, we offer assistance via our email, support@ExpressIRSForms.com.





Looking for something a little less hands-on? Check out ExpressACAForms, our full-service ACA e-filing option.

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5 Finance Tips for New College Grads

It’s the end of April, and the population of Intern Isle - the group of desks where the interns sit at SPAN Enterprises, parent company of ExpressIRSForms - is rapidly dwindling. Graduation is just around the corner, and while we’ll miss the ones leaving us, we know they’re all going on to do great things.

As new college grads all over the nation are learning, with great opportunity comes a few new responsibilities. With more than two-thirds of new alumni in debt - about $35,000 per graduate, on average - fiscal responsibility should be a top priority for new grads. Thankfully, we live in the age of the internet, when people who have developed fiscal responsibility blog about how to get the hang of it.

Take More Than Your Salary into Account
When applying for jobs after getting that degree, it may be easiest to go for whichever one offers you the highest salary, but that’s not necessarily the best idea. While the highest salary is certainly the more preferable salary to have, there are other factors to consider: medical and retirement savings benefits, for example, as well as cost of living and taxes, which vary state to state. A high salary might not be able to afford all the Treat Yo’self Days you’re planning if your new job doesn’t help with those not-as-fun-but-still-pretty-necessary benefits.

Create a Budget You Can Stick To
We’ll give you an example of a fairly basic - but effective - budget in a moment. The main thing to remember with this point, however, is that the budget you come up with has to work for you because you are the person holding you accountable for sticking to it. Setting your budget so that you put 30% in savings each month is admirable, but it’s not going to matter if you know you won’t be able to do that. If you find yourself having trouble with your budget, adjust it. It’s better to actually save $10 each month than it is to say you’re going to save $30/month and spend it all instead.

If you need a starting point, try a 50-30-20 budget. First, figure out your monthly income; of that, put 50% toward needs (rent, utilities, groceries), 30% toward wants (shopping, entertainment, restaurants), and 20% toward savings and debt repayment. If your student loans are substantial, or you’re looking to save more, you can swap the percentages, so 20% is allotted for wants and 30% goes toward your savings/loans.

Manage Your Debt and Be Wary of Accruing More
The best way to handle your student loan debt is staying on top of it. Pay off the loans with the highest interest rates first. You can pay the minimum towards balances with the lowest interest rates, but be sure to make payments larger than that on the bigger ones. Time says the “biggest mistake you can make is paying the minimum into each loan and waiting until you ‘make more money when you’re older’ to deal with them.”

On the other side of that coin, some debt can be beneficial: a solid credit history can open the door to all sorts of benefits, like a low-interest loan on your first car or house. This is why a lot of new grads will start looking into opening up a credit card. Just make sure if you do to avoid the oh-so-slippery slope of biting off (or purchasing) more than you can chew (aka pay back). A good way to help build your credit with a card is to get one, but reserve it for purchases you know you’ll be able to pay back immediately, or at least that month, like gas.

Start Saving for Retirement, Like, Yesterday
For most college grads, retirement is at least 30-40 years away, which may seem like a lot of time to build up funds for your golden years. But with medical and societal advances happening as they are, your retirement fund may need to last as long as the years you worked. One of the biggest mistakes those new to the workforce make is declining an employer’s retirement plan offer, usually because they’re in an entry-level position they don’t anticipate being in for a worthwhile amount of time or think it’ll be more beneficial to wait for a better-paying job to start saving.

Take advantage of the retirement plans offered to you as soon as you’re in a position where they’re offered to you; most employers offer 401(k) retirement plans, and many of those offer some form of matching benefits. All of your contributions to a retirement plan are yours to keep, regardless of whether or not you become fully vested in the plan itself. And if this is the case, you may even be able to roll over your plan into a new employer’s plan or an IRA (individual retirement account).

Ask for Help
Whether it’s from your parents, someone in HR or Accounting departments at your new job, the Internet, or your friendly neighborhood e-file provider, help can be found if you need it. Don't put off asking for help either; the longer you flounder with financial issues and strains, the harder they'll be to overcome. And, hey, if you’re reading this and you’ve got some financial advice for new grads, tell us all about it in the comments below!

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