Minimum Value

Going hand-in-hand through the ACA regulations with Minimum Essential Coverage (MEC), which we posted about earlier this week, is Minimum Value (MV). 

What is Minimum Value?
Healthcare plans meet a Minimum Value (MV) if they’re designed to pay for at least 60% of the total cost of medical services for a standard population, according to the Affordable Care Act (ACA). This minimum standard is the equivalent of a Bronze plan sold on the Health Insurance Marketplace. The plan’s benefits must also include a substantial amount of any inpatient hospital and physician services necessary.

In order to remain completely compliant with the ACA, the healthcare plan you as an employer offer your employee(s) must offer both Minimum Essential Coverage and meet the Minimum Value allowed. If the plan you offer doesn’t meet MEC or MV standards, you might have to pay an employer shared responsibility payment.

An employer shared responsibility payment is incurred when their employee receives a premium tax credit when purchasing additional insurance from the Marketplace. Since the employee would only receive this tax credit if their existing insurance didn’t meet MEC or MV guidelines, this could launch an IRS investigation into your coverage offers and you could end up paying out of pocket for each full-time employee considered under-covered.

However, just because an employee seeks additional insurance from the Marketplace doesn’t mean he/she will automatically receive the premium tax credit. If the insurance you provide meets MEC and MV, the employee will still be able to purchase additional coverage but they won’t be eligible for the credit.

The clock is ticking to get your ACA forms e-filed! The deadline is June 30, so be sure to sign up with ExpressIRSForms to complete your ACA filing today. And if you have any questions, our customer support team is happy to help! Give us a call Monday through Friday, 9:00 a.m. to 6:00 p.m. EDT, at (704) 684-4751 or send us an email anytime at support@ExpressIRSForms.com.

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Reporting Safe Harbor & Affordability on Line 16 of Form 1095-C

A couple of slots down from Line 14 on Form 1095-C is Line 16, as is usually the case with sequential numbers. The thing about Line 16 is that not everyone will fill it out. Read on to learn more about this reporting requirement.

Form 1095-C, Line 16
The thing to keep in mind about Line 16 is that you’ll only fill it out if certain situations apply for the employee (i.e., the employee not being full-time or employed at all) or for you, as the employer (i.e., Safe Harbor relief eligibility), during any month of the year.

ACA Code Series 2
The following Safe Harbor Codes are used on Line 16 of Form 1095-C:

• 2A: Employee was not employed during this month.
• If the employee worked even one day that month, Code 2A is not applicable.
• Code 2A may not be used for the month an employee resigns.
• 2B: Employee is not a full-time employee.
• Use Code 2B for a non-FTE who didn’t enroll in coverage that month (if offered).
• Use Code 2B for FTEs whose coverage ended before the last day of the month because the employee resigned (otherwise, the coverage would’ve continued).
• Use Code 2B for January 2015 if you offered MEC with MV to the employee no later than the first day of the first payroll period beginning that month.
• 2C: Employee enrolled in coverage offered.
• Code 2C should be used even if another code might apply (other than 2E).
• Don’t use Code 2C if Code 1G is entered in the “All 12 Months” box on Line 14.
• Don’t use Code 2C for any month a terminated employee is enrolled in COBRA (use Code 2A instead).
• 2D: Employee in a section 4980H(b) Limited Non-Assessment Period
• Use Code 2D for any month the employee is in a Limited non-Assessment Period for section 4980H(b).
• If Code 2E is also applicable, use that instead of Code 2D.
• 2E: Multiemployer interim rule relief.
• Use Code 2E for any month the multiemployer arrangement interim guidance applies to the employee.
• Code 2E should be used regardless of any other code that may apply.
• 2F: Section 4980H affordability Form W-2 safe harbor.
• Use Code 2F for any month you used the section 4980H Form W-2 safe harbor to determine affordability for the employee’s coverage.
• 2G: Section 4980H affordability federal poverty line safe harbor.
• Use Code 2G for any month you used the section 4980H affordability federal poverty line safe harbor to determine affordability for coverage.
• 2H: Section 4980H affordability rate of pay safe harbor.
• Use Code 2H for any month you used the section 4980H affordability rate of pay safe harbor to determine affordability.
• 2I: Non-calendar year transition relief applies.
• Enter Code 2I if non-calendar year transition relief under section 4980H(b) applies to this employee for any month.

At ExpressIRSForms, we help make sure you have the right codes in the right places. With built-in error checks, we’ll make sure no obvious errors are sent in your forms to the IRS. And if you have any questions along the way, our support team will be happy to help! Give us a call Monday through Friday, 9:00 a.m. to 6:00 p.m. EDT, at (704) 684-4751. Filing in the middle of the night? We offer 24/7 assistance via email at support@ExpressIRSForms.com.



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Minimum Essential Coverage

When we talk about the Affordable Care Act (ACA), the phrase “Minimum Essential Coverage” gets thrown around a lot, and it’s an important one. As an employer, you’ll need to keep Minimum Essential Coverage (MEC) in mind when providing your employees with health insurance. In this post, we’ll dive into why that is.

What is Minimum Essential Coverage?
Minimum Essential Coverage, or MEC, is the phrase used to describe the type of healthcare coverage you’ll need to provide to applicable employees in order to stay compliant with the ACA. It’s pretty straightforward in its definition as it applies to any coverage that offers at least the minimum amount of benefits required to be had by all American taxpayers.

MEC usually goes hand in hand with Minimum Value (MV), meaning the coverage you offer pays for at least 60% of the total allowed cost of benefits under the plan.

What Types of Health Insurance are Considered MEC?
For the most part, all Government and job-based insurance, as well as most private insurance, meet MEC requirements. This includes:

• Employer-sponsored coverage
• COBRA and retiree coverage
• Medicare Part A & Medicare Advantage coverage
• Most Medicaid coverage
• Children’s Health Insurance Program (CHIP) coverage
• Some types of Veterans Administration coverage
• TRICARE
• Coverage provided under the Peace Corps
• Coverage under the Non-appropriated Fund Health Benefit Program
• Refugee Medical Assistance (supported by Administration for Children and Families)

What Doesn’t Count as MEC?

• Plans that provide limited benefits typically don’t qualify as MEC, such as:
• Short Term Health Plans
• Fixed Benefit Health Plans
• Supplemental Medicare (Part D, Medigap)
• Some Medicaid
• Vision-only, Dental-only, and other limited benefit plans
• Grandfathered plans

So now that you know about MEC, get ready to e-file your ACA forms with ExpressIRSForms! All you need to do is create an account and you’re on your way. If you need any help with the process, don’t hesitate to contact our customer support team in Rock Hill, SC. We’re available by phone Monday through Friday, 9:00 a.m. to 6:00 p.m. EDT, at (704) 684-4751. If you can’t get us then, we offer 24/7 email assistance at support@ExpressIRSForms.com.



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What's So Important About Line 14 on Form 1095-C?

Understandably, Line 14 on Form 1095-C is causing hesitation for many filers. Just look at it:

What, so now you’ve got to come up with a code for each month the recipient was covered? Close: the IRS has already come up with the code (1A through 1I), you just need to enter the appropriate one for the recipient listed either in the “All 12 Months” box (if the code’s the same all year) or in each applicable month.

Offer of Coverage
So just what are you reporting with these codes? Well, Form 1095-C Line 14 indicates to the IRS what coverage was offered to the person for whom you’re filing the Form 1095-C. The code you use will tell the IRS if the coverage you offered met the ACA-required minimum essential coverage (MEC) and minimum value (MV) regulations, as well as if coverage was offered to the spouse and dependent(s) of the employee. Additionally, there’s a code to use in the event coverage wasn’t offered or if the employee only worked part-time.

ACA Line 14 Code Series 1

• 1A. Qualifying Offer: MEC providing MV offered to FTE; employee premium less than or equal to the 9.5% mainland single federal poverty line; MEC offered to spouse and dependent(s)
• 1B: MEC providing MV offered to FTE only
• 1C: MEC providing MV offered to FTE; MEC offered to dependent(s)
• 1D: MEC providing MV offered to FTE; MEC offered to spouse
• 1E: MEC providing MV offered to FTE; MEC offered to dependent(s) and spouse
• 1F: MEC not providing MV offered to FTE, dependent(s), or spouse
• 1G: Offer of coverage made to non-FTE who enrolled in self-insured coverage
• 1H: No offer of coverage made
• 1I: Offer made (or lack thereof) falls under Qualifying Offer Transition Relief for 2015

At ExpressIRSForms, we help make sure you have the right codes in the right places as you navigate these new ACA forms. Just create an account to get started e-filing your 1095s one of the easiest ways possible! And if you have any questions on the way, we’ll be happy to help. Just give us a call Monday through Friday, 9:00 a.m. to 6:00 p.m. EDT, at (704) 684-4751. If you miss us, send us an email to support@ExpressIRSForms.com, and we’ll reply as soon as possible!



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What Every Small Business Should Know About the ACA

When it comes to the Affordable Care Act, a lot of the conversation is spent on Applicable Large Employers (ALEs) and their new requirements and regulations. While that’s an important conversation to have, businesses with fewer than 50 employees are affected by the ACA as well. But do you know just how affected you are by the ACA as a small business owner?

You’re Still Somewhat Responsible for your Employees’ Health Care Coverage
Even if you don’t meet the 50 FT-employee-threshold that requires you to provide health insurance for your employees, as an employer you’re still a little responsible for making sure they get covered. This means you’ll need to provide certain information about healthcare Marketplaces if you opt not to offer fully-insured plans to your employees.

If you do decide to provide coverage and other benefits to your employees, you’ll need to establish a plan for making offers of coverage to every eligible employee within 90 days of hire. You’ll also need to provide them with a Summary of Benefits and Coverage (SBC) to explain their health plan and what it costs.

You’re Also Required to File
Keep in mind that if you do make offers of coverage to your employees, you’re required to file with the IRS reporting this coverage each year, just as ALEs do. However, small businesses offering fully-funded plans will need to file Forms 1094-B and 1095-B.

For more specific ACA information tailored to the size of your business, you can visit the US Small Business Administration’s page.

And for more information about e-filing your ACA Forms, give us a call at ExpressIRSForms. We’re available Monday through Friday, 9:00 a.m. to 6:00 p.m. EDT, at (704) 684-4751, to answer any questions you have about the e-filing process. We’re also available 24/7 at support@ExpressIRSForms.com.



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What You Should Know About ACA Reporting Penalties

We recently spoke about the penalties and fees you could face from the IRS if you fail to comply with the new reporting requirements as outlined by the Affordable Care Act (ACA). Today, we’re going to dive a little deeper into how an employer can become liable for paying these compliance or reporting fees.

What puts you at risk for a penalty?
The main penalty to watch out for as an employer is the Employer Shared Responsibility Payment (ESRP). You become liable for this payment if you either

• (a) don’t offer health coverage to at least 95% of your full-time employees (and their dependents), and at least one of them receives a premium tax credit from the Marketplace, or
• (b) you do offer health coverage to at least 95% of your full-time employees but at least one is still able to receive a premium tax credit to help pay for coverage from the Marketplace (meaning your coverage didn’t meet Minimum Essential Coverage and Minimum Value regulations).

So, keeping in mind what we learned in our last post, you can avoid these penalty risks by providing the right amount of coverage to the right amount of employees as defined by the ACA, and by reporting this coverage to the IRS each year on Form 1094 and Form 1095.

The IRS is offering transition relief for employers who need it for the 2015 tax year, which you can read more about on the IRS’s website here.

How do you know if the coverage you offer is affordable and provides minimum value?
Coverage is considered affordable if the employee’s share of the premium is less than 9.5% of the employee’s annual household income. Since employers generally don’t know their employees’ entire household incomes, you can determine if the employee’s share is affordable based on:

1. the wages on their W-2,
2. their rate of pay, or
3. the federal poverty line.

You’ll know if a plan provides minimum value if it covers at least 60% of the total cost of benefits expected to be incurred under the plan.

A good way to avoid any filing penalties is to make sure to e-file ACA Forms with ExpressIRSForms; we’ll make sure everything you fill out is correct and in place before you file your return with the IRS. To get started, just create a free account!

Have questions? That’s what we’re here for - from 9:00 a.m. to 6:00 p.m. EDT, Monday through Friday, at (704) 684-4751, or 24/7 at support@ExpressIRSForms.com.



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Employer Shared Responsibility FAQs, Part 2

And we’re back! Let’s jump right into part two of our Employer Shared Responsibility FAQs:


Are companies with employees working outside the US subject to the Employer Shared Responsibility provisions?
Typically, for determining whether or not you’re an ALE (Applicable Large Employer), you’ll only take into account the work performed in the United States. In other words, if a foreign employer has a large workforce worldwide but doesn’t have at least 50 workers in the US, they wouldn’t be subject to the Employer Shared Responsibility provisions.

Are companies that employ US citizens working abroad subject to the Employer Shared Responsibility provisions?
If you employ US citizens abroad, you’d typically only be subject to Employer Shared Responsibility provisions if you have at least 50 FT employees performing work in the US. Generally, US citizens working only abroad will not be taken into consideration when determining ALE status.

How does an employer that wasn’t in existence throughout the preceding calendar year determine if it employs enough people to be subject to the Employer Shared Responsibility provisions?
If your business wasn’t in existence any day in the previous calendar year, you’d only be considered an ALE (and therefore need to file) if in the current year you’re expected to hire/employ an average of 50 or more full-time employees. To determine next year’s status (a.k.a. the year after the first year your business was in existence), you’ll use the same general rules as everyone else: counting up your full-time employees to determine if there are more than 50 of them.

If two or more companies have a common owner (or are otherwise related), are they combined to determine whether they employ enough people to be subject to the Employer Shared Responsibility provisions?
Yes, according to Section 4980H, in order to determine ALE status, you would need to combine the number of employees for any groups with a common owner, or that are otherwise related. If the combined total is more than 50 full-time employees, each employer is subject to the Employer Shared Responsibility provisions.

Do the Employer Shared Responsibility provisions apply to employers in states where a federally-facilitated exchange (or Marketplace) has been established on behalf of the state?
Yes. As an ALE, you’re subject to an Employer Shared Responsibility payment if at least one (1) of your FT employees receives a premium tax credit, which is only available to eligible individuals who receive coverage through a Marketplace.


So now that your questions have been answered, are you ready to get started e-filing your ACA return? Just log into your ExpressIRSForms account to create your forms, or let us do it for you over at ExpressACAForms!

Didn’t see your question in either of our posts? Just reach out to our friendly customer service center and we’ll try to help any way we can! We’re available by phone Monday through Friday, 9:00 a.m. to 6:00 p.m. EDT, at (704) 684-4751 and by email 24/7 at support@ExpressIRSForms.com.

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