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Section 6056 Reporting

Are most companies paying to a third party to report this next year? I'm curious how this is impacting companies or what steps you are taking now to be prepared for the reporting next year.

Answers

Topic Expert
Regis Quirin
Title: Director of Finance
Company: Gibney Anthony & Flaherty LLP
LinkedIn Profile
(Director of Finance, Gibney Anthony & Flaherty LLP) |

We use Paychex to process payroll and they will be handling all of our 6056 Reporting.

The last time I looked at the topic in January (it was evolving), the employer needed to generate a notice to each employee that included certain employee demographic information, employer information, and month by month information about whether the employee was offered medical coverage, the lowest cost premium for employee, and if there were any applicable safe harbors for healthcare reform (contributions no greater than 9.5% of salary, federal poverty line, etc).

As this process will be new for all, it is difficult to tell how burdensome it will be to generate these forms. As such we opted to outsource the responsibility.

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

Payroll has, continues to be and will in the future become so complicated it is easier to outsource to a 3rd party, especially when they take responsibility for errors and omissions in the calculations, and reporting.

Think of it as just another insurance tax payment.

Derek Benson
Title: Controller
Company: Olameter Inc.
(Controller, Olameter Inc.) |

Yes and no. The reporting here is related to payroll and you need to have many inputs related to payroll, but it is also part of your overall benefits program and how you administer it. Many employers will go ahead and outsource payroll, but will keep managing the benefits in house (still using a broker, but actually entering in employees through the carriers themselves). As such, it is different systems you need to buy and each company has to assess what the cost is and whether it is worth ti. As I mentionned below, my current payroll provider is looking at charging an unreasonable sum to help manage this process for us. At a certain point, I am better off just hiring an extra employee to manage the extra bit of paperwork and taking a bit of risk on vs. going with a full outsourced solution.

Anonymous
(President and CEO MobileAccountantAZ) |

It's cheaper for my clients to use a 3rd party payroll system than to have me spend hours doing it plus I hate payroll

Topic Expert
Christie Jahn
Title: CFO
Company: Prime Investments & Development
(CFO, Prime Investments & Development) |

Surprisingly our payroll provider isn't offering it yet, but our insurance carrier has someone that will do it but it seems really expensive.

Derek Benson
Title: Controller
Company: Olameter Inc.
(Controller, Olameter Inc.) |

It is a massive expense if you don't already have an integrated HR system. I have my payroll only outsourced to ADP and the costs they are proposing in order to have the integrated HR suite which includes the ACA reporting is shocking. Looking at something like $70-100K a year for 1,400 employees which is unreasonable to me for a simple insurance portal & reporting.

I have been working on my end for a month or so now lining up different suppliers and payroll providers to get a better solution. Some options that I've looked into that might interest you;

Thomson Reuters Onecall - https://tax.thomsonreuters.com/onesource/aca-compliance/ I received a quote for about $13K a year for employers between 1,000-5,000 employees. This is reporting only and is not an insurance portal. You need to be the one who generates all info to upload into their system and they manage the reporting side. So you need to have the systems in place to be able to generate the data. Good option if you have the staff in place who can manipulate your current payroll data and understand some of the ACA codes. This is kind of an in-between option of handing the reporting yourself and using a company to do the actual tax reports.

Benetech: http://benetechadvantage.com/ I liked these guys a lot. Cost for their group insurnace platform (where employees have self-service and can do open enrollment there) was running around $2.25/employee/month (not sure if this was comparable to what you were being quoted). They are also partnered up with Kronos I believe to run the payroll side as well if you want to have full integration. Otherwise, without having payroll integration, you will have to run ongoing imports into their system if you remain with your current payroll provider.

I'm kind of leaning towards just running the reporting myself in Excel for 2015 through Thomson Reuters and running through a full payroll/HR integration in 2016 to replace ADP.

Kate Grangard
Title: Cfo
Company: Gehring group
(Cfo, Gehring group) |

There are a number of solutions emerging that are independent of the payroll companies. These include HRIS systems, and independence tax reporting submission vendors. I'll try to put 90 minutes of info into a quick review of the Forms and what's needed:

If you have a Fully insured health plan the insurance carrier will send a report to the employees (1095B) that shows each employee, their dependents, and each month that each person (employee, and eac dependent) was covered by your group health insurance plan. If your company a large employer with 50+ full time plus full time equivalent employees (part time hours up to 120 hours per employee per month added together/120 hours) your company must file the a Form 1095C (note common control rules apply when determining Company size). The Form 1095C is prepared when fully insured for each employee that was eligible to be on your health plan. Data to be reported includes (line 14) the type of coverage an employer offers by month-note this is a form under ACA so best source of this info may be your benefits admin or HRIS system. By type of coverage-was it minimum essential coverage only, minimum value, was it offered to all employees plus spouse, plus dependents? They all require different codes. There are also elections on line 22 of the transmittal (form 1094C) such as if the employer offers a qualified plan that can affect the indicator code entered here. And if there was no offer of coverage to the employee during that period, that has a separate code. Line 15 is where the lowest cost premium for self only coverage is entered, if required, on a month by month basis. Line 16 is where the heartache lies for many employers-this line reflects the employee's cverage information. The codes used here tell, for each monthif an employee was not a full time employee for the month, in a wait period, enrolled, or if they "waived coverage"-what safe harbor the employer is claiming to avoid the ESRP in the event the employee applies for and receives a subsidy on the exchange. So it is important to monitor changes in each individual's coverage through the year and to include info on people who waived coverage.

For self insured employers, the reporting is the same for lines 14-16 but there is also a requirement to complete part III of the form 1095c that includes the monthly information on each covered employee and their dependents that the carrier reports on Form 1095b when an employer is fully insured. Codes can be tricky as in lines 14 & 16 the code represents the entire month, yet for part III the box is x'ed if there is coverage for even 1 day of the month. When self insured an employer (plan administrator) must also report this form for covered Indiv who are not employees-cobra and retirees.

Form 1094c is the transmittal and includes info on all other members of controlled group, number of employees total per month, and number of eligible employee per month. Also includes info on eligible safe harbors such as a qualified offer, or transition relief applies.

I hope running through the essential data for the forms helps. I've been reviewing independent softwares that can accept a data export from another file, allows an employer to update firms before filing , and is engaged with the IRS to do the electronic filing mandated for employers with 250 or more returns through the IRS new AIR system. If you have a number of people who are part time or variable-Worxtime is a good solution. They get a payroll export each month and show a dashboard and also do the reporting for 1095. If it's just forms, Greatland Yearli can take a feed from Ben admin and also has tooling for both large and small employers. Medcom I believe also has a solution, and likely more will enter the market now that April 15 tax season is done.

i hope this information is helpful (though long). My goal was to review the info required to be collected as the year progresses so that in the event you don't have a Ben admin system to track coverage effectively, you can work with HR to track it while you get the right solution sourced.

(Agent, JKS Solutions, Inc.) |

QB1095.com is handling this and it was way cheaper than the alternatives I priced out for 3rd party consultants. $5/user and $100 flat fee to e-file and it syncs with QuickBooks payroll data to complete the forms (or alternatively you can use an excel file to import data if you don't use QuickBooks.)

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