It’s kind of a bold statement, I know. But after countless conversations with brokers struggling with 6055 and 6056 concerns, a decent number of their applicable large employer clients are challenged to find practical solution for this reporting.
Normally, they would lean on their payroll and HR system to deliver an option for generating forms 1094 and 1095 C in 2016. And, some will. However, many inquiries into several HR and payroll companies seem to indicate either a lack in functionality and preparedness or a big jump in cost to get the job done. This leaves benefit brokers and their clients in a tough spot of not being able to properly create the 6055/56 reporting.
As I have mentioned in previous posts, there is a complicated logic required to complete forms 6055 and 6056. This logic uses at several factors that determine the codes on 1094 and 1095 C. below are a few to consider:
- Dates of hire and waiting periods determine when employees are in the limited assessment period. Partial months are treated differently than full months in terms of how the forms are coded.
- Termination, rehire dates and class changes impact offer of coverage and safe harbor designations. Employees with a number of changes during the year can see a variety of different codes appearing on form 1095.
- Offer of coverage determines whether 70% (2015) and 95% (2016) levels are reached or significant penalties are to be paid.
- Safe harbor designations and income drive affordability calculations.
- Transition relief provides the flexibility to avoid penalties altogether.
All of this information and more needs to be carefully coordinated to make its way onto the forms.
Also see: "3 solutions to meeting ACA's 6055 and 6056 reporting requirements."
Weiskirch is principal, EmployeeTech, Inc. Reach him at firstname.lastname@example.org.
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