Pub. 3 Issue 2

26 www.glancda.org Ask Armando “ A sk Armando” is a new addition to our quarterly newsletter. Ar- mando Buitrago has been in the employee benefits indus- try for over 25 years. He worked for and managed the CNCDA Trust benefits for more than 20 years and now is a consul- tant for Benefit Compass. He continues to work with a large number of auto dealers in Southern California. As this is my first “Ask Armando” column, I will address a topic that is one of the biggest concerns with the Afford- able Care Act (ACA or Obamacare). For future articles I ask you to please email or call me with questions that are of interest regarding Health Care Re- form, controlling your healthcare costs, compliance or anything relating to your benefits program. These Q&A’s will be published in my upcoming columns. Q: I heard there are new reporting requirements just issued under Obamacare, what are they? The Affordable Care Act (ACA) created new reporting requirements under Internal Revenue Code (Code) Section 6056. The ACA added Code Section 6056, which requires employers to file information returns with the IRS and provide statements to their full-time employees about the health insurance coverage the employer offered. This is IRS reporting that all companies (dealerships) with 50 or more full time eligible employees will have to file in January 2016, reflecting 2015 data. Q: What information must an employer report to the IRS to satisfy Section 6056? A: The final regulations provide, under the general method of reporting, that an employer must file a separate Form 1095-C (or other form the IRS designates, or a substitute form) for each of its full-time employees, and a transmittal on Form 1094-C (or any other form the IRS designates, or a substitute form) for all of the returns filed for a given calendar year. Q: What is the intended use of the information? A: The IRS will use the information provided on the information return to administer the employer shared responsibility rules in Section 4980H. The IRS and the employees of an employer will use the information provided as part of the determination of whether an employee is eligible for the premium tax credit under the ACA. The employer shared responsibility rules are those that require employers to pro- vide full time employees with minimum standard and affordable healthcare or potentially face penalties. Q: When must an employer furnish the statements to full-time employees? A: Employers must furnish the statement to each full-time employee on or before Jan. 31 of the year immediately following the calendar year to which the information relates. This means that the first Section 6056 employee statements (the statements for 2015) must be furnished to employees no later than Feb. 1, 2016 (Jan. 31, 2016, being a Sunday). Q: Is relief available from penalties for incomplete or incorrect returns filed or statements furnished to employees in 2016 for coverage offered in calendar year 2016? A: Yes. In implementing new information reporting requirements, short-term relief from reporting penalties is frequently provided. This penalty relief generally allows additional time to develop or implement procedures for collection of data and compliance with the new reporting requirements. Accordingly, the IRS will not impose penalties on companies that can show they have made good faith efforts to comply with the new reporting requirements. GLANCDA members have free access to Benefit Compass Insurance Services’ compliance resources and bulletins. If your dealership is not prepared, has not been informed or has not implemented a process for collecting this data for the IRS, please feel free to contact me with questions. I look forward to answering your specific questions in my upcoming articles. 