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3 insights from an ACA notice pioneer

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Getting the first batch of Form 1095-C employer health coverage notices out to the enrollees, former enrollees and Internal Revenue Service was possible, but it wasn’t much fun.

Jeana Parker, vice president of strategic initiatives at Orlando, Florida-based PlanSource Benefits Administration Inc., talked about the challenges involved with sending out the 2015 wave of 1095-C notices today in an interview.

Related: IRS tackles 1095-B versus 1095-C filing confusion

PlanSource is a major employee benefits and human resources support services company.

The Affordable Care Act now requires employers to send out notices showing whether they offer employees health coverage. Employees with group health coverage can use the notices to prove that they have minimum essential coverage and need not pay the penalty that the law imposes on many people who lack what the government defines as enough health coverage.

Employees without group health coverage can use their 1095-C forms to show that they are eligible to apply for ACA public exchange plan premium subsidies.

An affected employer is supposed to get a 1095-C coverage notice out to each worker and former worker after the end of the year. An employer is also supposed to send a 1095-C summary sheet, Form 1094-C, to the Internal Revenue Service.

Parker oversaw the PlanSource effort to help 723 clients measure 750,979 workers’ hours, produce 459,342 1095-C forms, and transmit 446,602 1095-C forms to the IRS.

The IRS has told employers it will give them extra time to get the second wave of 1095-C forms, for calendar year 2016, to employees and former employees.

Related: IRS postpones ACA reporting deadline

But Parker said her team is preparing to send out most of the notices on the original schedule, even though it’s not clear how the next presidential administration will handle the ACA coverage reporting requirements.

Last year, employers struggled to get their forms out, Parker said.

“This year,” she said, “it will obviously be much smoother.”

For more about what Parker saw last year, when she grappled with the 1095-C requirements for the first time, read on:

Parker says getting 1095-C's is worse than doing W-2's. (Image: IRS)

Parker says creating 1095-C’s out is worse than doing W-2′s. (Image: IRS)

1. Getting 1095-Cs out is hard

A 1095-C looks much like the Form W-2 that employers use to report workers’ wages and payroll tax totals.

But the 1095-C compliance burden is different, Parker said.

“I believe it’s much great than the W-2 burden,” she said.

Most employers can get most W-2 information from the payroll system, but creating a 1095-C involves combining data from payroll systems, benefits systems and other systems that may not fit together very well, Parker said.

Related: View: Group health coverage is ‘Obamacare’

All the IRS told employers about data matching errors was that there were errors. (Photo: Thinkstock)

All the IRS told employers about data matching errors was that there were errors. (Photo: Thinkstock)

2. The error notices are too vague

The IRS reviewed 1095-Cs for “inconsistencies” between the information in government record records and the exact names and Social Security numbers employees had on their 1095-Cs.

Data-matching conflicts affected only about 5 percent of the forms, Parker said. But resolving conflicts was difficult, because the IRS said only that a form contained at least one error, and not how many errors there were, or what the errors were.

“That was definitely a problem for many clients,” Parker said.

The data validation problem has not been a problem for W-2s because, in the past, at least, the IRS has not validated W-2s in the same way that it validates 1095-Cs, Parker said.

IRS workers themselves seemed to be frustrated by their inability to give callers better ideas about how to resolve the data-matching conflicts, Parker added.

Related: Employers face ACA Social Security number reporting snarl

A few restaurants with multiple locations learned something from compiling their 1095-C's. (Photo: Thinkstock)

A few restaurants with multiple locations learned something from compiling their 1095-Cs. (Photo: Thinkstock)

3. Most clients already covered all workers

The 1095-C program is supposed to be part of an effort to get more employers to provide health coverage for more workers.

But most of the PlanSource clients were already providing minimum essential coverage for all of the employees affected by the Affordable Care Act group health coverage rules.

The only employers who seemed to learn much from their 1095-C effort, or who had many full-time, year-round workers without health coverage, were some restaurants, entertainment companies and other companies with multiple locations that had workers working at multiple locations.

In some cases, Parker said, multi-location employer, or “controlled group,” was surprised to learn that some workers had been working a total of 30 or more hours a week for two or more companies within the controlled group.


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