Federal paperwork reviewers recently signed off on a major package of Patient Protection and Affordable Care Act (PPACA) forms.
The package includes Form 1094-C, which is the form employers are supposed to use to tell the IRS whether they offered workers minimum essential coverage (MEC), and Form 1095-C, which is the form employers are supposed to use to tell the workers themselves whether they had or were offered MEC.
See also: IRS redesigns PPACA coverage notice drafts.
Employers can send 1095-C forms to workers this year, for the 2014 plan year, if they want to.
“Applicable large employers” will have to send 2015 plan-year forms to workers by Jan. 31, 2016.
Elizabeth Vollmar, a compliance lawyer at Lockton Companies, says in a commentary that the final IRS instructions for the forms will create a massive data collection and assimilation effort.
The bad news, she says, is that the IRS left the draft forms as is.
The good news is that employers and others who assumed the final forms would look like the draft forms can continue to move forward with the data-gathering efforts they’ve been developing.
For a look at some of the gremlins commenters found in the draft versions of the forms, read on.
1. Mailing monsters
Jonathan Foley, a director at the U.S. Office of Personnel Management (OPM) — the benefits office for IRS workers and other federal workers — has written to ask whether OPM really has to mail the 1095-C forms to federal employees.
Most federal employees already can see paystubs, W-2 forms, W-4 forms and other forms online, and OPM could easily put the 1095-C forms in the same system, Foley says. If regulators would let OPM deliver the forms electronically, that would save taxpayers millions of dollars, he says.
2. Time monsters
Several commenters note that employers, insurers and outside plan administrators are rushing to try to comply with complicated, rapidly changing PPACA-related rules and regulations.
M. Garrett Hohimer, a commenter in the law department at Aon Hewitt, asks in his comment letter for the IRS to delay the current Jan. 31, 2016, reporting deadline for the 2015 plan-year 1095-C forms at least one month.
Service providers usually deliver employees’ Form W-2 information in mid to late January, or even as late as Jan. 31, Hohimer writes.
If the IRS tries to have the 1095-C team send the forms out to employees by Jan. 31, the team may not have any chance to see the W-2 information needed to calculate whether the employer’s health coverage meets PPACA affordability requirements, Hohimer says.
Brian Marcotte, president of the National Business Group on Health, says getting the 1095-C forms right will depend on employees telling about births, divorces and other major life changes promptly.
In the real world, “plan sponsors often do not receive such notification immediately,” Marcotte writes. “Sometimes not until months after the event.”
Late employee reporting of life changes could lead to a need for retroactive coverage changes and accidental 1095-C errors, Marcotte says.
Marcotte is asking regulators to hold off on imposing employer reporting error penalties for at least the first year, as long as the employers make reasonable efforts to correct errors within a reasonable period after finding the errors.
3. A telephone monster
Hohimer, the Aon Hewitt lawyer, may have discovered the most frightening field in all of the forms: Box 10 on Form 1095-C.
Box 10 is a required telephone number field.
The 1095-C will have to put in the telephone number of a call center at the employer, a benefit plan administration firm, one of the plan’s insurers, one of the player’s law firms, or some other entity that will:
Have to develop a team of call center representatives who understand Form 1095-C well enough to at least steer bewildered workers to appropriate sources of information. Over the telephone. Without getting anyone sued for breaches of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) health information privacy requirements, or other state or federal privacy, discrimination or consumer protection laws.
Paperwork reviewers let the IRS keep the box in.