Your 1095 C Forms from AscentisAscentis provides a screen for you to map your existing HR employment...

Your 1095-C Forms from Ascentis

Understanding the Patient Protection and Affordable Care Act (PPACA) and the annual reporting requirements requires detailed

knowledge of tax and legal issues. Ascentis strongly recommends your organization seek out professional services from your

insurance brokers, legal counsel or other professional advisors. It is incumbent that the Client validate the accuracy of all data prior

to publishing 1095-Cs and filing with the IRS. Ascentis relies on the Client providing accurate information, as well as auditing all

outputs of the ACA process, and at no time shall Ascentis, assume any liability from inaccuracies in the 1095-C’s, 1094-C, or from any

errors, flaws, failure, or fault of the software which would cause it to produce an incorrect or unexpected result.

Contents

Overview ................................................................................................................................................................................. 2

Who Gets a 1095-C? ............................................................................................................................................................... 2

How Many Forms Will an Employee Get? .............................................................................................................................. 2

Form Details – Part I ................................................................................................................................................................ 3

Form Details – Part II ............................................................................................................................................................... 4

Line 14 ................................................................................................................................................................................. 5

Line 15 ................................................................................................................................................................................. 7

Line 16 ................................................................................................................................................................................. 8

Form Details – Part III ............................................................................................................................................................ 10

Prerequisite Setup................................................................................................................................................................. 11

Validate Data ..................................................................................................................................................................... 11

Perform ACA-specific Setup Tasks .................................................................................................................................... 12

Processing & Publishing ........................................................................................................................................................ 16

Distribution to Employees .................................................................................................................................................... 21

Employee Access ............................................................................................................................................................... 21

Administrator View ........................................................................................................................................................... 22

Ascentis ACA Client Portal..................................................................................................................................................... 22

Overview The Affordable Care Act (ACA) requires that certain employers offer medical insurance coverage to full-time employees

and their dependents. For all employees eligible for medical coverage, those employers must provide an annual

statement explaining the available insurance. The 1095-C form is that statement. For complete details on the form and

related information, see http://www.irs.gov/uac/About-Form-1095-C. For Ascentis HR customers who have purchased

our ACA year end reporting solution, this document describes our approach to the 1095-C and your steps to perform.

Who Gets a 1095-C? Ascentis will generate a 1095-C form for each employee who meets these criteria:

Social Security Number entered, AND

At some point during 2015, Full Time status (per ACA definition) OR enrolled in self-insured plan

If terminated, must not be archived

Prerequisite Setup

Ascentis provides a screen for you to map your existing HR employment statuses to the standard ACA status codes required for reporting

How Many Forms Will an Employee Get? An employee receives a 1095-C form per employer during 2015. If an employee was active in multiple HR companies in

2015, then a separate form will be provided for each. And if the employee moved between multiple EINs within the

same HR company in 2015, then a separate form will be provided for each EIN.

Prerequisite Setup

Each employee is assigned a single Payroll Directory or Payroll Code at a time in HR. Ascentis provides a screen for you to define EINs you must report for ACA, and then map those existing PR Directories or Codes to the EINs. The end result is that each employee is assigned to one or more EINs for 2015 for the purpose of ACA reporting.

http://www.irs.gov/uac/About-Form-1095-C

Form Details – Part I Let’s review the actual 1095-C form, line by line, so you can understand the information derived by Ascentis.

Employee Header Information

The first six lines of Part I capture basic information for the employee receiving the 1095-C. This is simply the data stored

on the employee’s Personal tab in Employee Manager.

Employer Header Information

The next seven lines of Part I record key information for the employer providing the 1095-C.

Prerequisite Setup

The EINs to Report screen is available to define employer information for ACA reporting purposes. There you will define these values for lines 7 – 13 as well as dictate how employees are grouped into EIN(s).

Form Details – Part II Part II is the meat and potatoes of the form; this section displays the offers of coverage and related information for

premium amounts, safe harbors, and types of relief for the employer. This is the content of particular interest to the IRS.

Your Ascentis benefits plans and employee data are inputs to a series of criteria and calculations to derive these values.

Prerequisite Setup

In addition to the employee ACA status mapping step noted earlier, Ascentis provides screens to perform two other critical setup steps to drive this section:

Plan inventory – determine which of your Ascentis health plans to include, and of those which are self-insured, provide Minimum Value, and provide Minimum Essential Coverage

Periods – define the durations of your Administrative Period and Measurement Period

Be sure to view the IRS website and instructions for guidance on this setup.

The top of this section includes a Plan Start Month box; it is optional for 2015 reporting, and Ascentis is not populating it

this year. (It is expected to become a requirement next year.)

The rest of Part II is comprised of Lines 14 – 16:

For each calendar month, the applicable code is entered. If the same code applies for all 12 calendar months on a line,

the code is entered in the All 12 Months column and the individual calendar month boxes are left blank.

For each of these lines, this document explains how Ascentis leverages your setup and data and applies IRS guidelines to

determine the values to display.

Tip

The IRS instructions can potentially be interpreted differently for specific scenarios. Ascentis has built system logic to reflect our interpretation. But to ensure you have maximum flexibility for the forms you finally generate, we provide you with a screen to preview the system-determined Part II codes for any employee and manually override the default codes we have determined if you see fit after reviewing any situational questions with your professional advisors.

Line 14 This line reports the employer’s offer of coverage to the employee.

1-Series Codes

These are the possible codes to display in Line 14, listed alphabetically:

Code

The Employee…

The Benefit Plan…

1A Is in ACA Full Time status, AND

Is offered coverage (i.e., eligible)

Provides Minimum Value, AND

Provides Minimum Essential Coverage, AND

Is affordable, AND

Offers coverage to employee + spouse + dependents

1B Is in ACA Full Time status or Other

Employee status, AND

Is offered coverage



Offers coverage to employee only

1C Is in ACA Full Time status or Other


Is offered coverage



Offers coverage to employee + dependents

1D Is in ACA Full Time status or Other


Is offered coverage



Offers coverage to employee + spouse

1E Is in ACA Full Time status or Other


Is offered coverage



Offers coverage to employee + spouse + dependents

1F Is offered coverage Does not provides Minimum Value, AND

Provides Minimum Essential Coverage

1G Is in ACA Other Employee or ACA Non-

Employee status for all of 2015 (i.e., not Full Time for any month), AND

Is enrolled in plan

Is self-insured

1H No offer of coverage at all, OR

Does not provide Minimum Essential Coverage, OR

Enrolled in multi-employer plan

1I Is in EIN which has Qualifying Offer Method Transition Relief

Code Hierarchy

What if an employee meets the criteria for more than one code in the same month? In those cases, Ascentis will pick the

code based on this logic:

1. 1A – represents qualifying offer and trumps any conflicting code

2. 1G

3. 1I

4. 1B – 1E

5. 1H

6. 1F

For example, based on hierarchy above, if an employee qualified for 1I and 1F in the same month, 1I would display in

Line 14 for the month because it is higher on the list. The exception is that if an employee is in a multi-employer plan for

a month (which results in code 2E on line 16), then 1H must be displayed in line 14.

Mid-year Employment Changes

What if an employee gains eligibility during the year (for example, a new hire or someone changing from part-time to

full-time)? For the months in 2015 prior to being eligible, the code of 1H will represent no offer of coverage. And then

once offered coverage, the appropriate code will be displayed for each month per the criteria noted above.

Tip

The IRS instructions say “An employer offers health coverage for a month only if it offers health coverage that would provide coverage for every day of that calendar month.” So if an employee becomes eligible on March 1, then January – February get 1H, and March – December get the appropriate code based on what is offered. But if the employee becomes eligible on March 15, then January – March get 1H (because coverage as not offered for all of March).

What if an employee loses eligibility during the year (for example, a termination or someone changing from full-time to

part-time)? The same tip as above about “every day of that calendar month” still applies here, but there is nuance in

how COBRA continuation is considered:

If the employee loses coverage through termination, then COBRA is not considered for the 1095-C. Whether

the former employee enrolls in COBRA or not, any months after eligibility is lost get 1H for no offer.

If the employee loses coverage through reduction in hours, the COBRA is considered and the offer of

coverage via COBRA is used to determine the appropriate code per criteria above.

Prerequisite Setup

For COBRA benefits to be considered for 1095-C codes, the individual must be enrolled in COBRA in Ascentis HR.

Line 15 This line is only completed for individuals who received 1B – 1E for any month(s) in Line 14.

Rather than a series of codes like Lines 14 and 16, Line 15 displays a dollar amount. This amount represents the

employee share of the lower cost monthly premium for employee only coverage offering Minimum Value and Minimum

Essential Coverage.

Note this is unrelated to the coverage the employee is actually enrolled in; this is about what is available to the

employee and meets the criteria above.

Example: An employee is enrolled in full family coverage in a PPO plan at a cost of $500 per month in payroll deduction,

but that employee has the option enroll in employee only coverage in an HMO plan offering MEC and MV at $100 per

month out of her paycheck, then $100 is reported in Line 15, not $500.

Tip

Zero is not the same as blank in Line 15. Zero displays for a month when the employee had a code 1B – 1E in Line 14, and the employee share for the lowest cost is $0.00, i.e. the employee doesn’t have to pick up any portion of the premium. A blank box in Line 15 indicates nothing needs to be reported for the month.

Line 16 Whereas Lines 14 and 15 present what is offered to the employee, Line 16 is based on actual enrollment or safe harbor

relief where appropriate.

2-Series Codes

These are the possible codes to display in Line 16, listed alphabetically:

Code

Criteria to determine code

2A Not employed on any day of the calendar month

2B Not a ACA Full Time employee AND offered Minimum Essential Coverage AND did not enroll, OR

Mid-month end of coverage based on termination (e.g. if employee terminated March 15 and benefits coverage ends before March 31, then 2B for March)

2C Enrolled in coverage offered

2D

In an initial measurement or waiting period up to 3 calendar months after hire (e.g. if employee started March 15 and is eligible on May 1, then 2D for March + April)

In a limited non-assessment period, based your definition in Ascentis of the ACA Measurement and Administrative Periods (e.g. On Periods form, you defined 4 months for Measurement Period and 2 months for Administrative Period. Employee is hired February 10. Limited non-assessment period (months when 2D will display on Line 16 for employee) are February (first month of employment) + March – June (measurement period) + July – August (administrative period).

2E Enrolled in plan flagged on Plan Inventory screen as multi-employer plan AND affordable AND offers Minimum Value

2F Plan determined as affordable per W-2 safe harbor, AND

Employee declined to enroll

2G Plan determined as affordable per Federal Poverty Line safe harbor, AND


2H Plan determined as affordable per Rate of Pay safe harbor, AND


2I

Used for any months before start of 2015 plan year if other than January 1, AND

Plan is affordable, AND

Plan provides Minimum Value

Example: If affordable, Minimum Value plan year started April 1, 2015, employees may get 2I for January – March.

Blank Employee has 1A in Line 14, OR

No Line 16 code criteria apply (Line 14, but not Line 16, is required to have all months represented)

Tip

1A will be the most common value reported in Line 14. Since that requires no code reporting in Line 16, you may see a lot of blank boxes in Line 16. The IRS treats Line 16 as exception reporting and doesn’t expect every box to be filled as on Line 14.

Code Hierarchy

What if an employee meets the criteria for more than one code in the same month? In those cases, Ascentis will pick the

code based on this logic:

1. 2E

2. 2C

3. 2I

4. 2D

5. 2B

6. 2A

7. 2F

8. 2G

9. 2H

For example, based on hierarchy above, if an employee qualified for 2C and 2D in the same month, 2C would display in

Line 16 for the month because it is higher on the list.

Mid-year Employment Changes

What if an employee gains or loses eligibility during the year? The same approach applies as noted for Line 14 above in

terms of which months are treated as non-employee months and how COBRA is handled.

Form Details – Part III This is the final section of the 1095-C form. Part III is only completed when the plan is self-insured and is not a multi-

employer plan.

Prerequisite Setup

On the Plan Inventory screen, you will indicate which health plans are self-insured and which are multi-employer.

For such plans, all covered individuals will be listed starting in Line 17 in this sequence:

Employee

Spouse

Children, in order by DOB starting with earliest

Columns (a) – (c) is straightforward information from the employee and dependent data in Employee Manager.

Columns (d) – (e) will display an X for each month in which one of the listed individuals is enrolled.

Prerequisite Setup Throughout the previous sections explaining the data presented on the 1095-C and how Ascentis derives it, you saw

several references to prerequisite setup. Below is a single summary list of the setup steps you must perform to ensure

the 1095-C forms are accurate. Consider this a checklist as you prepare for publishing the 1095-C forms.

Validate Data

Employee & Dependent Data

Parts I and III of the form show basic employee information like name, SSN, and address. Ensure that data is current in

Employee Manager. Some common scenarios not to overlook include:

• Employees that were active as of Jan. 1, 2015

• New hires for 2015 from date-of-hire

• Dependent(s), including social security number(s)

• Retirees who are still on your plan

• Owners, directors, partners... anyone who is enrolled in your plan

• Union members if they are enrolled in your plan, or if you are required to contribute to their plan

Also, remember that terminated employees who have been archived will not be considered in ACA reporting. So be sure

that you un-archive anyone who should receive a 1095-C.

Employment Status

ACA reporting is all about the status of the employee and determining if they are full-time or part-time under the ACA

definition. This “ACA Status” drives both who gets a 1095-C and Offers of Coverage codes reported on Line 14. Thus it’s

important to validate the Employment Statuses of your employees, including the effective dates, for all of 2015.

Benefits Eligibility Data

The Offer of Coverage codes on Line 14 of the 1095-C are also driven off of the Eligibility Rules for your Medical Plans.

Therefore it’s important to validate the Eligibility Rules for your Medical plans are correct for all of 2015.

Benefits Enrollment Data

You already have these defined for your ongoing benefits enrollment needs. Keep in mind that COBRA coverage and

enrollments must be entered in Ascentis to be used in criteria for Part II lines, specifically for situations when an

employee lost coverage through reduction in hours and was offered COBRA. Validate that your enrollment data is

correct for all of 2015.

Payroll Directory/Code

Since the EIN considered for each employee is based on the Payroll Code/Directory entered as part of the employee

compensation record, all such employee changes during 2015 should have been entered with an effective date on the

employee compensation record.

Perform ACA-specific Setup Tasks

Accessing the Setup Forms

The ACA menu will appear for the administrator under Settings:

After selecting Setup from the menu, you will see these tabs:

Periods Tab

On this tab, define the Measurement Period and Administrative Period you will use:

The values in the drop-down list for each field represent a number of months, and you will find all options allowable by

the IRS. Ascentis has also built in logic where applicable, such as the IRS rule that if you use a 12-month Measurement

Period, then you must use a 1-month Administrative Period (such as the example above)

Plan Inventory Tab

In the left column of the table on this tab, you will see all of your active medical plans listed. Indicate which plans should

be included in ACA reporting, and of those which are self-funded, multi-employer, offer Minimum Essential Coverage,

and/or offer Minimum Value.

ACA Employee Status Tab

This tab lists all of your employment status codes and enables you to map each to one of the three standard ACA

statuses used for reporting.

Medical Plan A

Medical Plan B

EINs to Report Tab

First, add each EIN you are including in ACA reporting.

Next on this same tab, you will see all of your existing Payroll Code or Directory codes. Map each of those to one of the

EINs you have created. This is critical because it determines how each employee is assigned to an EIN (recall that EIN is a

box to populate for the employee in Part I of the 1095-C).

Tip

What if an employee moved from EIN1 to EIN2 during 2015? The employee should receive two separate 1095-C forms, one for each EIN. Since the EIN considered for each employee is based on this Payroll Code/Directory mapping, all such employee changes during 2015 should have been entered with an effective date on the employee compensation record. Otherwise, the system will be unable to determine when – or if – the employee actually moved between EINs and thus not correctly generate two 1095-Cs.

After that mapping, the final step on the tab is define details for the EIN (ALE Name, Address, Contact, Eligibility

Certifications, etc.) which are inputs for the 1094-C form.

ACA Widget

Outside of those tabs under the Setup menu, you must also perform a setup step in the ACA Affordability Widget, which

the administrator can find under the Widgets menu in Setting:

In the ACA Affordability Widget, define these parameters, which will be used in calculating Line 14 and Line 16 codes

which consider affordability:

Tip

This widget also includes a section to include plans you want to appear in the affordability analysis provided by the widget. Note that this is unrelated to the Plan Inventory tab under the Setup menu described above. The Plan Inventory is where you select which plans to use for reporting on the 1095-C; the plan selections on the widget are only for its analysis reports and does not impact the 1095-C.

Processing & Publishing

Accessing the Setup Forms

Once all of that prerequisite setup is in place, it’s time to view, audit, and publish the forms for your employees. Under

the ACA menu in Settings, the admin will see a link labeled Process & Publish:

After selecting that link, you will see these tabs:

Setup Validation Tab

This tab provides a helpful dashboard to confirm your setup so far and any outstanding gaps:

If you review this information and you think there may be gaps in your setup, go back and complete that before

proceeding to the next processing tab.

Tip

This tab currently includes sections for each of the four tabs under the Setup menu. It does not currently indicate if you remembered to define safe harbors in the ACA Affordability widget. Don’t forget that!

Offer and Coverage Tab

As we’ve said before, Part II (Lines 14 – 16) is really the heart of the form and of particular interest to the IRS. This tab

allows you to preview that data for employees and then override any values as you see fit.

Efficient Mass Audit

First, use the Export to Excel link to generate an Excel file for all of the employees.

This spreadsheet includes the following columns for each employee:

EIN (an employee with multiple EINs during 2015 will have a row for each in the file)

Employee Name and ID

Hire Date and Termination Date

Is the employee receiving a 1095-C? (Yes or No)

If No, then why not?

Monthly values for Line 14, Line 15, and Line 16

The purpose and benefit of providing this information in Excel is that you can use that tool’s powerful filtering and

sorting features to isolate exactly what you want to audit. For example, you may want to find all employees not getting a

1A in Line 14 and analyze why to validate.

What if I have Data to Correct?

If you identify specific employees where inaccurate employee or benefits data is leading to the wrong code, you can

update that source data in HR and then click the Recalculate button on the tab. All employee codes will be recalculated

and you can export to Excel again if desired to continue auditing.

What if I Disagree with a Code Determined by Ascentis?

We understand that in some cases grey IRS language may lead to different interpretations of which code should apply

for an employee in a month. Alternatively, your professional advisor may advise you to use a different code. Therefore

you also have the flexibility on this tab to override the codes determined by Ascentis for Lines 14 – 16 with your

preferred codes.

If you use the Excel file and identify and employee for whom you want to override a code, you can use the Find button

on the tab to open the employee’s record. You will see the same codes from Excel in the System Logic row of values, and

then a Your Override row where you can select a new value.

If you save an override, when you publish the actual 1095-C PDF form, it will reflect the override rather than the original

system-determined code.

Covered Individuals Tab

This tab lets you export Part III data to Excel to preview. As a reminder, Part III displays all covered individuals (employee

plus spouse and/or children) who were enrolled during 2015 in a self-funded plan which is not multi-employer.

The file’s columns match those in Part III of the 1095-C so you can audit what will be printed on the forms. Unlike the

previous tab, this one does not enable you to override any values. If there is an issue with who is or isn’t listed as a

covered individual, correct the benefits enrollment records which provide this data.

Tip

If your plan is fully-insured, this section will be blank per the IRS Regulations.

Review & Publish Tab

This is the last step in the process. You’ve audited and corrected information as needed, and now you’re ready to

generate and distribute the forms.

First, click the Produce button to create the forms for the employees. You will see status information below the button.

Next, find any individual employee to view the PDF form as it will be published.

To complete the process, check the box to sign off on the terms and conditions and to enable the Publish button. Finally,

click the Publish button to generate the forms and initiate distributing them to employees.

Distribution to Employees

Employee Access You’ve created the forms…how do they get into your employees’ hands? They will be published in ESS under My

Benefits → 1095-C for My Taxes.

Your employees also have a paperless option. When they log in to ESS (as soon as you are on release 9.6), a pop-up will

appear, and will continue to appear until selected:

The Set Your ACA 1095-C Preference link directs to this page, where the employee can select Yes or No. The employee

will get the form in ESS either way; this is determining if the employee will also get a paper copy mailed.

Administrator View Common question: I’m an admin; can I just define a default paperless setting for employees? No, the IRS requires that

the paperless opt-in is done by the employee. But you do have the option to monitor selections so you can follow up

with employees as needed.

Go to the Welcome & Status page under the ACA menu:

You will see a couple links to view status reports:

Ascentis ACA Client Portal http://www.ascentis.com/ACA/Ascentis-ACA-Welcome.asp (password is AscentisACA)

Get our latest and greatest information on the ACA regulations and how Ascentis helps manage ACA compliance and

reporting. This site includes ACA Best Practices, webinar recordings, links to relevant government ACA websites, FAQ

from Ascentis (updated weekly), and more!

http://www.ascentis.com/ACA/Ascentis-ACA-Welcome.asp

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