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Quick Reference Guide: 2018 ACA Employer Reporting Requirements

The Hays Research and Compliance Team has assembled a quick reference guide for 2018 calendar year reporting. This guide is specifically relating to 2018 ACA Employer Reporting Requirements.

 


Section 6055 & 6056 Reporting

Non-ALEs sponsoring insured plans are not required to report
under either Section 6055 or Section 6056

 


Forms

Forms 1094-A & 1095-A
  • Marketplace (exchange)
Forms 1094-B & 1095-B
  • Issuers, non-ALE (less than 50 FTE) that are self-insured
Forms 1094-C and 1095-C
  • Applicable Large Employer (ALE)

 


Due Dates

Form 1095: March 4, 2019
  • Paper delivery
  • Electronic only if the individual has consented to electronic delivery of the 1095 (in writing)
Form 1094: February 28, 2019
  • April 1, 2019 if filing electronically
  • Electronic filing required for ALE with 250 or more 1095s

 Employers may file for an automatic 30 day extension via Form 8809

 


Form 1095-C Line 14 Codes

1A     Qualifying Offer: MEC/MV offered to employee, self-only coverage < than 9.56% single – 2018 federal poverty line and at least MEC offered to spouse & dependent(s)

1B     Minimum essential coverage providing minimum value offered to employee only

1C     MEC/MV offered to employee and at least MEC offered to dependent(s) (not spouse)

1D     MEC/MV offered to employee and at least MEC offered to spouse (not dependent(s))

1E     MEC/MV offered to employee and at least MEC offered to dependent(s) and spouse

1F     MEC but NOT MV offered to employee, or employee and spouse or dependent(s), or employee, spouse and dependents

1G     Offer of coverage to employee who was not full-time for any month of the calendar year and who enrolled in self-insured coverage for one or more months of the calendar year

1H     No offer of coverage (or employee offered coverage that is not MEC)

1I     Reserved

1J     MEC/MV offered to employee and at least MEC conditionally offered to spouse (but no MEC offered to dependents)

1K    MEC/MV offered to employee and at least MEC offered to dependents and at least MEC conditionally offered to spouse

 


Form 1095-C Line 16 Codes

2A     Employee not employed during the month

2B     Employee not a full-time employee

2C     Employee enrolled in coverage offered

2D     Employee in a section 4980H(b) Limited Non-Assessment Period

2E     Multiemployer interim rule relief

2F     Section 4980H affordability Form W-2 safe harbor

2G     Section 4980H affordability federal poverty line safe harbor

2H     Section 4980H affordability rate of pay safe harbor

2I     Reserved

 


COBRA

COBRA for terminated employee:
  • Coverage goes to end of the month in which employee terminates (1E, 2C)
  • Coverage does not go to the end of the month in which employee terminates (1H, 2B)
  • All months following the month in which the employee terminates (1H, 2A)
  • COBRA participants who have not been employed at any time during the calendar year (1G)
COBRA for drop in hours:
  • For a person who had family coverage and was therefore offered COBRA for self, spouse and dependents: (1E, 2C) fill in line 15
  • For a person who had self only coverage and was therefore offered COBRA for self only: (1B, 2C) fill in line 15
  • For a person who had coverage for self and a dependent and was therefore offered COBRA for self, and their dependent: (1C, 2C) fill in line 15
  • For a person who had coverage for self and their spouse and was therefore offered COBRA for self and their spouse: (1D, 2C) fill in line 15

Use 2B if COBRA is not elected

 


Self-Insured Employers

Former Employees and Other Non-Employees
  1. Retirees
  2. COBRA beneficiaries
  3. Non-employee directors
    • No requirement to certify OFFER of coverage, but still must report coverage provided
      • Self-insured sponsors may use either Forms 1094/1095-C or Forms 1094/1095-B
      • If using 1094/1095-C, use Code 1G on line 14

Code 1G goes in all the 12 months column on line 14

 


Special Rules for HRAs

Self-insured major medical plan and an HRA
  • Report only the major medical plan information
Insured major medical plan and an HRA
  • Not required to report if the individual is eligible for the HRA because the individual enrolled in the insured major medical plan
Part III
  • HRA must be reported in Part III for any individual who is not enrolled in a major medical plan of the ALE Member
  • Applicable to the employers with less than 50 FT/FTEs too

 


Resources

2018 Instructions for Forms

2018 Form 1095-C

2018 Form 1094-C

 


Disclaimer:

These quick reference materials are provided for general information purposes only and should not be considered legal or tax advice or legal or tax opinion on any specific facts or circumstances. Readers and participants are urged to consult their legal counsel and tax advisor concerning any legal or tax questions that may arise.

Any tax advice contained in this communication (including any attachments) is not intended to be used, and cannot be used, for purposes of (i) avoiding penalties imposed under the U.S. Internal Revenue Code or (ii) promoting, marketing or recommending to another person any tax-related matter.

Hays Companies Enters into Agreement to Join Brown & Brown, Inc.

(Minneapolis, MN)  Jim Hays, Chief Executive Officer of Hays Companies, and J. Scott Penny, Chief Acquisitions Officer of Brown & Brown, Inc. (NYSE:BRO), today announced that Brown & Brown, Inc. (Brown & Brown) has entered into an agreement to acquire selected assets of the Hays Companies insurance operations.  The transaction is expected to close in November 2018, subject to certain closing conditions.

Hays Companies will operate as a region inside Brown & Brown Retail.  The operations will continue to be led by Jim Hays, as Chief Executive Officer, and Mike Egan as President/COO of the Hays Companies.  Following completion of the transaction, Jim will join Brown & Brown, Inc. as Vice Chairman and will serve on the board of directors, and Mike will become a Regional President of the Brown & Brown Retail Division.  Mike will continue reporting to Jim and Jim will report up to Powell Brown, Chief Executive Officer of Brown & Brown.

Jim Hays stated, “After 24 years as an independent insurance broker, we feel the time is now to partner with an industry leader who shares our cultural values.  Brown & Brown has the same client-focused attitude that our clients have come to expect from the Hays Companies team. This partnership enhances our ability to provide expanded solutions for our clients and new opportunities for our employees.  Because the Hays Companies name, our executive group, and our account teams will not change, we expect a smooth transition.  As far as we are concerned, it is business as usual.  This is a new era for Hays Companies.  I am very excited about the future as a part of the Brown & Brown family.”

Powell Brown stated, “For the past several years, Jim and I have gotten to know one another both professionally and personally.  It became clear to me over that time that our organizations share a common sales, service, entrepreneurial and teammate focused culture which delivers results and that joining the Hays Companies team with Brown & Brown will be mutually beneficial to our collective clients, teammates and carrier partners.  We are excited to have the experience and client-focused team of Hays Companies join with us under the leadership of Jim and Mike.”

You may view this video of Jim Hays and Powell Brown discussing Hays Companies joining the Brown & Brown team.

Jim Hays formed the Hays Companies in 1994. Since formation, Jim, along with Mike Egan, Steve Lerum, and Bill Mershon, have successfully grown Hays Companies to number 22 on Business Insurance Magazine’s list of 100 largest U.S. brokers, with annualized revenue of approximately $200 million. Headquartered in Minneapolis, Hays Companies is comprised of over 700 risk management and employee benefits professionals in 32 locations across 21 states. The Hays Companies focuses on risk management and commercial insurance, employee benefits, consulting services, specialty programs and private client services.  Hays Companies’ current operations can be reviewed at www.hayscompanies.com.

Brown & Brown, Inc., through its subsidiaries, offers a broad range of insurance products and related services. Additionally, certain Brown & Brown subsidiaries offer a variety of risk management, third-party administration, and other services. Serving business, public entity, individual, trade and professional association clients nationwide, Brown & Brown is ranked by Business Insurance magazine as the United States’ sixth largest independent insurance intermediary. For more information on Brown & Brown, visit www.bbinsurance.com.

For press inquiries please contact Andrea Field, Hays Companies National Director of Marketing & Strategy, at 612-387-0952 or afield@hayscompanies.com.

Hurricane Impacts – The Aftermath of Hurricane Florence

Large scale catastrophic events can have significant impacts to your business for many reasons. The most obvious is direct damage to your facilities, which can also result in impaired operations. However, there are many secondary issues which can have detrimental effects. Utilities (including power, water, sewer, gas, etc.) often become unreliable due to wind damage or flooding. Infrastructure can sustain damage, which impedes access to and from your facilities. Governmental or other civil authorities may issue orders which restricts access to your locations. Even if your business is not located in a catastrophe-prone area, you can be impacted if large customers or suppliers sustain damage which hinders their production.

Catastrophic conditions often trigger ancillary additional coverages that are included in many policies. Frequently these additional coverages have their own sublimits, specific deductibles or waiting periods. It is important to review your specific policy terms and conditions. The following discussion is not intended to be a comprehensive review of coverages, but rather provide an idea on what to look for depending on your circumstances.

Protection & Preservation of Property (Property Damage & Time Element) – frequently costs are incurred to temporarily protect your property from an impending threat (for example boarding up in advance of a hurricane). This may also cause a business to shut down, resulting in a loss of income. Issues to consider specific to this coverage may include:

  • The costs generally need to be spent on insured property due to an imminent threat from insured physical loss or damage and be considered temporary in nature.
  • If the event ultimately does not materialize, generally the deductible for the event that would have happened is what is applied to the coverage.
  • There may be a stipulated recovery time for Time Element losses (for example 48 hours before & after protecting property).

Ingress/Egress (Time Element) – there may not be access to your property due to damage to roadways, bridges, tunnels or other infrastructure. This may result in Time Element losses. Issues to consider specific to this coverage can include:

  • The prevention of access generally must be from physical damage of the type insured to property of the type insured and at an insured location.
  • Whether the damage needs to be within a certain radius of an insured location.
  • There may be a specific number of days that the coverage is afforded for or separate sublimit.
  • Whether access need to be totally shut off, or if partial impairment qualifies coverage.

Civil/Military Authority (Time Element) – authorities may restrict access to your facility, resulting in a Time Element loss. Issues to consider specific to this coverage can include:

  • The order must be from physical damage of the type insured at an insured location or within a specified radius from the impacted location.
  • There may be a specific number of days that the coverage is afforded for or separate sublimit.
  • Whether access need to be totally shut off, or if partial impairment qualifies coverage.
  • Whether there is a specified amount of time that the order must be in place (Waiting Period):
    • For coverage to apply, and is subject to a different deductible OR
    • Which serves as the deductible for this coverage

Service Interruption (Property Damage & Time Element) – your facility may sustain damage from a loss of incoming/outgoing gas, sewer, electricity water, refrigerant, etc. This may also result in a Time Element loss for operations which rely heavily on utilities for their processes. Issues to consider specific to this coverage can include:

  • Review exclusions to confirm if change of temperature or spoilage is covered specifically for Service Interruption (for operations where this may apply).
  • Does physical loss/damage of the type insured to property of the type insured apply or can any accidental event to the utility provider’s property occur to trigger coverage. Some policies require that a specified peril (i.e. wind, flood, etc.) damage the utility’s property before coverage applies. Additionally, damage to certain types of the utility’s property may be excluded (transmission and distribution systems for example).
  • The damage to the utility’s property may need to have occurred within a certain distance from your affected location.
  • Losses may be subject to a specified waiting period before coverage applies (24 hours for example). This measurement may be different between Property Damage (the length of time utilities are interrupted) and Time Element (the length of outage and the amount of time to resume normal operations). The waiting period can serve as a coverage qualifier with a separate deductible applicable or can be considered the deductible itself.
  • The insured may need to notify the utility of the outage (save this documentation in support of your claim).

Contingent Time Element – Even if one of your locations is not in an area affected by the storm, customers or suppliers critical to your operations can be damaged by a catastrophic event. These types of scenarios can become complicated quickly as the damage has not occurred to your property and you may have very limited control over the situation. Issues to consider specific to this coverage can include:

  • Generally, the customer/supplier must have been impacted by physical loss or damage of the type insured to property of the type insured and at a contingent time element location.
  • The definition of a contingent time element location should be reviewed closely to confirm the number of customer/supplier tiers included. Policies can consider only the first/direct tier, a specified number of tiers, or include all tiers.
  • There may be specific sublimits/deductibles for Contingent Time Element coverage, which can also be scheduled on a per customer/supplier basis.

Attraction Property (Time Element) – Your property can be spared from significant damage, but it may rely heavily on a nearby property, which you do not own or control, that becomes damaged (for example, a hotel which relies on guests being attracted to a nearby non-owned theme park). Issues to consider specific to this coverage can include:

  • Generally, the Attraction Property must have been impacted by physical loss or damage of the type insured to property of the type insured.
  • The Attraction Property may need to be within a specified radius from your location.
  • There may be a specific number of days that the coverage is afforded for or separate sublimit

Deductibles: Deductibles may seem like a relatively straight forward issue, but can quickly become complicated if there are multiple perils involved (i.e. flood & wind in a hurricane), several locations, or if they are calculated on a non-monetary basis. Deductibles can apply on a:

  • Per Occurrence basis-one deductible applies to all losses associated with the same event (no matter the number of locations involved).
  • Per Location basis – a separate deductible is applied to each location involved, even if more than one location is involved in an event.
  • Combined Property Damage/Time Element basis or separately for each coverage type.
  • Generally, only the largest deductible applies to a loss, unless it is otherwise specified in the policy.

There can be several different ways that deductible values are determined. Some examples are as follows:

  • Monetary Deductibles-a specific stated dollar amount.
  • Percentage Deductibles-generally a stated percentage in the policy is applied to the values present at a damaged location (Property Damage) or to the annual Time Element value that would have been earned (Time Element) to determine the monetary value of the deductible. Depending on policy wording, the percentage can be applied to all values combined or separately to each individual unit of insurance involved (Building, Stock, Contents, Time Element, etc.). Percent deductibles are often applicable to properties that are in high hazard wind or flood zones.
  • Day Equivalent (or Average Daily Value)-a stated number of days multiplied by the total daily Time Element value at the affected location (plus the proportion of the Time Element value at any affected interdependent locations).
  • Day Equivalent Contribution-a stated number of days multiplied by the Time Element value for which the damaged property contributes to the entire affected location (plus the proportion of the Time Element value at any affected interdependent locations). This deductible can have a significant advantage over the Day Equivalent when a location has a loss where only part of operations are affected. For example, consider a plant that has three lines; all which contribute to 1/3 of the operations’ value. If only one line is damaged, then the Day Equivalent Contribution deductible only applies to the Time Element value passing through the damaged line. This results in a deductible which would be 1/3 of the Day Equivalent, which considers the total Time Element present.

In an increasingly complex and interdependent marketplace, insurance claims can quickly become complicated and confusing-especially following a catastrophic event. Hays has the expertise to assist with navigating complex property damage and time element claims; with the goal of mitigating operational impacts and expediting the claims process.

Contact our claims team for assistance:

Emergency Claims Hotline

612-758-8551

1-844-239-4937

Email:

hurricaneclaims@hayscompanies.com

Hurricane Preparation and Recovery – Claims Guidelines

Hays is standing by to assist clients who have been affected by Hurricane Florence; including those with facilities that have been directly impacted or experiencing supply chain disruptions.

If this is an emergency, please contact our Emergency Claims Hotline at 1-844-239-4937 or via email at hurricaneclaims@hayscompanies.com

Hays has the expertise to support you with navigating the complicated claims process, which allows you to focus more of your time and energy on assisting employees, mitigating losses and restoring business operations.

We suggest the following three-phase approach to facilitate an efficient and successful recovery.

Phase I – Emergency Response
1. Notify Hays and your insurer of the loss as soon as possible.

2. Coordinate your loss response team and direct responsibilities for each individual. Typical parties which may be involved include the following: Risk Management, Finance, Operations, Supply Chain, Logistics, Third-Party Vendors, and your Hays Claims Consultant. We suggest appointing a singular direct point of contact with the adjuster (often the risk manager).

3. Establish accounting procedures for capturing loss activity (typically a separate accounting string to which all loss-related expenses are tracked).

4. Contact remediation contractor(s) to complete emergency repairs (water extraction/drying equipment). Protect buildings and equipment from additional damage by making temporary repairs. Restore service to fire protection systems as quickly as possible. Document conditions with photographs.

5. Evaluate and separate damaged from undamaged stock. Document with photos and retain all property for the adjuster to inspect. Create an itemized inventory of the property including type (SKU, make/model, S/N, etc.), description, quantity, disposition (undamaged, reprocess, dispose of) and price.

6. Create a recovery plan for re-establishing operations and mitigating business interruption. Typical options include the use of undamaged inventory on hand, outsourcing to sister facilities, implementation of additional shifts/OT, and rental of temporary alternate locations.

7. Review applicable leases (Landlord/tenant, leased machinery/equipment, etc.) for insurance requirements and notify third parties who may have an additional interest.

Phase II – Recovery and Claim Submission
1. Review of policy jointly with Hays to identify policy provisions and deductibles which may be relevant. Frequently there are special coverages, sublimits or deductibles that apply to hurricane-related losses.

2. Commence with reconstruction. This should be coordinated with the adjuster to ensure agreement on the scope of work and how invoices will be issued (competitive bid, agreed lump sum, or time & materials basis).

3. Track and document all loss-related repair expenses (emergency response, temporary repairs, reconstruction, inventories, etc.).

4. Identify and document loss-related issues that impair operations, which may include: direct physical damage at your location(s), infrastructure damage (bridges, roadways, etc.), utility interruption (sewer, power, gas, etc.), damaged facilities of customers/suppliers and orders issued by civil/governmental entities. For issues that do not originate at your location, confirm the specific cause and site where the damage occurred.

5. Prepare loss analyses demonstrating Business Interruption losses and Extra Expenses in a clear and concise format, in accordance with your insurance policy.

6. Prepare overall damage estimates and communicate potential loss exposures with the adjuster to ensure they understand the total impact to your business.

7. Submit claim(s) to your insurer including explanatory narrative, calculations and supporting documentation. Request advance payments from your insurer as necessary. It is essential to communicate timelines for payment expectation with the adjuster well in advance, to allow adequate time for evaluation and processing.

8. Continually monitor timelines for claim process and business recovery.

Phase III – Ongoing Activities, Adjustment, and Settlement
1. Respond to inquiries from your insurer and their representatives.

2. Direct timely and complete exchange of claim documentation. Analyze insurer’s evaluation/response to determine areas of difference and coordinate with Hays to strategically respond.

3. Prepare for and embark upon final claim negotiations and settlement with the insurer.

Please contact your Property marketing representative or the claims team at any time to discuss your claim and how Hays may be of assistance.

Emergency Claims Hotline

612-758-8551

1-844-239-4937

Email:

hurricaneclaims@hayscompanies.com

Upcoming MN Workers’ Compensation Indemnity Benefit Increase Effective 10/1/2018

A new bill hailed as the most comprehensive workers’ compensation legislation in the last twenty years was recently signed into law in Minnesota. Following both houses’ unanimous approval, Governor Mark Dayton also gave the bill his signature on May 20th.

The bill, H.F. 3878, included recommendations from the Workers’ Compensation Advisory Council, a group comprised of appointed representative as well as the presidents of the largest statewide Minnesota business organization and the largest organized labor association. Supporters of the bill believe it will help improve the system’s administrative process, and directly benefit employers, health care providers and injured workers.

At a high level, the following changes will be enacted as a result of the bill’s passage:

  • The maximum number of weeks of TPD benefits eligibility has increased from 225 weeks to 275 weeks
  • The PPD benefits schedule has been increased
  • PTD benefits eligibility has increased from age 67 to age 72

These changes will go into effect for injuries on or after October 1st, 2018. If you have question about how the new legislation will impact your business, please contact your local Hays representative or email us at info@hayscompanies.com.

To view the complete language for 2018 Minnesota Sessions Laws Chapter 185—H.F.No.3873, please click here.

Hays Headquarters Named Largest Insurance Brokerage in Minneapolis

Hays Companies is pleased to announce that our Minneapolis office, which is also the location of our corporate Headquarters, was named the largest insurance brokerage in the Minneapolis/St. Paul metro area (also known as the Twin Cities) by the Minneapolis/St. Paul Business Journal.

The publication, which is amongst the most prestigious business news outlets in the state of Minnesota, surveyed offices located within the 24-county metro area. For businesses that are headquartered in the Twin Cities, such as ours, results were based on companywide revenue for all operations as well as the number of employees.

We’re especially honored by this recognition as it not only reflective of our growth as an organization, but also the continued support of the community in which we were founded.

To view the complete list, please click here.

Insurance Journal ranks Hays in Top 25 of 100 Property/Casualty Agencies for 2018

Hays Companies was named one of the Top 25 Property/Casualty Agencies in the United States by the Insurance Journal, a leading industry publication for the Property/Casualty arena. The list is based on total revenue for 2017 and is comprised of agencies focused on retail policies.

Per the Insurance Journal, the list is indicative of “the nation’s most successful independent insurance agencies and brokerages.”

Hays Companies ranked 22nd this year, after experiencing $90,300,000 in total Property/Casualty revenue. This is the 25th year of consecutive growth for Hays.

“Our customers are at the center of everything we do,” explained Jim Hays, CEO of Hays Companies. “Each year, we are growing organically and extending our reach to better meet the needs of our clients. We will continue to be an industry leading company by going above and beyond to ensure we are the broker of choice for our customers.”

To view the full list, please click here.

Hays Companies Rises in “Top 100 Insurance Brokers” Rankings

Hays Companies is pleased to announce that they were recently named as the 22nd largest insurance broker in the United States by Business Insurance Magazine. This is the 25th year of consecutive revenue growth for Hays Companies.

Hays’ 2018 ranking is reflective of the entrepreneurial spirit on which they were founded and was an increase from their 2017 standings (for which they were ranked #23).  As a privately-held organization, Hays’ organic growth has been entirely accomplished by their team of experienced professionals.

Of Hays’ explosive trajectory, CEO Jim Hays said “We have continued our growth by investing in our people and building client-focused teams. Our business model encourages creative, out-of-the-box solutions that allow us to adapt quickly to the evolving needs of our clients.”

The list, which is generated annually, ranks the 100 largest insurance brokers in the country by revenue for all U.S. based clients in the previous calendar year.  Hays Companies’ 2017 brokerage revenues of $197,600,000 were up 2.2% over the 2018 fiscal year.

To learn more about the list and to view the complete rankings, please click here.

Founded in 1994, Hays Companies specializes in risk management, insurance, and employee benefits.

Hays Companies Volunteers with Habitat for Humanity

For almost a decade, Hays Companies has built a strong partnership with Habitat for Humanity to combat homelessness and provide affordable housing for families within the communities where we work and live.

This month, Hays team members assisted with building a Habitat for Humanity home in St. Paul, Minnesota. Of the experience, Robert Rangel, Hays Companies’ Director of Claims Management and Volunteer Committee Chair said, “It was a fulfilling day for our team. It’s not every day you have the opportunity to learn how to construct a garage and build a roof with your colleagues. We were grateful to be out in the community together giving back to a wonderful organization.”

One of Hays Companies’ core values is being impactful and contributing to the communities we serve. Habitat for Humanity is a great outlet for employees to live out this value by volunteering.  “We encourage our employees to get involved with organizations in the community that they’re passionate about. Habitat for Humanity is an organization with a mission that Hays’ employees believe in,” stated Chief Executive Officer, Jim Hays.

Hays Companies Ranked 16th Largest Benefits Broker in 2017

Hays Companies is pleased to announce that we were recently named the 16th largest Benefits Broker in the large-group market by Employee Benefit Adviser in 2017!

Employee Benefit Adviser is one of the top industry publications, serving over 146,000 brokers, advisers, consultants, and financial planners, amongst others. Their annual list was published in partnership with miEdge, a business intelligence firm from whom the data analytics were provided.  The leading firms were ranked exclusively on health and welfare revenue, provided by Form 5500 reporting data as of Dec. 11th.

Having enjoyed over 20 years in the business, our sustained and continued growth has been an area of pride and contributed to our 2017 ranking, which included our 2017 revenue of $38.48 million and 22.45% year-over-year growth.

To view the complete list, please click here.