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Affordable Care Act (ACA)

 

 

What is an IRS Form 1095B and can I ask the Fund to send me a copy?

For several years after passage of the Affordable Care Act of 2010, individuals who failed to maintain healthcare coverage during a tax year were required to report this on their IRS Form 1040 and pay an Individual Mandate tax penalty. The Benefits Fund was required to report the months on which it provided coverage to both the member and to the IRS. However, the Individual Mandate penalty was repealed as of 2019. Since most members will not need month-to-month coverage verification, the Benefits Fund will no longer be obligated to automatically issue Form 1095B.

The Benefits Fund is still required to report month-to-month coverage provided to each member to the government and can provide such information to you upon written request. You may need this information if you had received “Premium Tax Credits” for ACA Marketplace coverage during the tax year.

The IRS has many extensive explanations posted on its website on the many ACA topics. The IRS webpages specifically explaining the Form 1095 series information returns can be followed here: https://www.irs.gov/Affordable-Care-Act/Individuals-and-Families.

 


 

Is medical coverage through the Benefits Fund “minimal essential coverage”?


All medical plans provided by the Benefits Fund are considered to be “minimum essential coverage”. Each month of coverage provided to each member of your family by the Benefits Fund is shown on IRS Form 1095B.


What information can the Fund provide to a large employer who is required to report on whether “Affordable” coverage of “Minimum Value” is provided to its employees in connection with the “Employer Mandate”?


The ACA contains provisions which may allow the IRS to impose penalties under the employer shared responsibility provisions of the ACA (the so-called “Employer Mandate Penalty”). Employers with less than 50 “full-time equivalent” (FTE) employees are not subject to this provision, but those with 50 or more FTE employees are required to file annual reports with the government declaring whether they offer coverage. If an employer questions how it determines whether it has 50 or more FTE employees, or believes it may qualify for transitional relief, it should seek advice from its tax consultant or refer to guidance published by the IRS in Q&A format found here .


Beginning in the 2016 tax season, large employers became obligated to submit IRS Informational Forms 1094-C and 1095-C to enable the IRS to examine whether they offered affordable coverage of a minimum value to substantially all its full time employees. The Fund does not have information needed to establish whether an employer provides “Affordable” coverage. The law does not obligate the Fund to prepare these forms for contributing employers because some of the participant and dependent information possessed by the Fund is private and other information is not possessed by the Fund. However the Fund can confirm that from 2014 to the present all its medical plans satisfy the ACA “Minimum Value” standard.



Does the Benefits Fund impose a waiting period in excess of 90-Days?


No. This is relevant because the ACA prohibits plans from imposing waiting periods in excess of 90-Days. The terms of the Benefits Fund provide that an employee is covered on the first day of the second month after the employee has satisfied any applicable work (compensable service) requirement specified for the covered classification as defined in the applicable collective bargaining agreement. CBAs of different employers set forth numerous job classifications, such as full-time, part-time, casual, trainee, apprentice, temporary, probationary, and summer help. CBAs are negotiated by employers and labor unions to provide different compensation and rights to employees performing different functions.


Since the Benefits Fund provides coverage no more than 61-Days after an employee is otherwise eligible to be enrolled after satisfying the applicable CBA’s substantive requirement for eligibility, the Benefits Fund does not impose a waiting period in excess of 90-Days.


 


Are employers required to report the cost of health coverage on IRS Form W-2s they issue to employees covered under this multiemployer fund?

Since the IRS has granted employers who contribute to multiemployer plans a temporary W2 reporting exception for health coverage provided by multiemployer plans, the Benefits Fund does not report the cost of medical coverage.

The IRS states reporting requirements for multiemployer fund contributions may change in the future, but as of this time, W-2 reporting is voluntary with respect to employees receiving health care coverage through a multiemployer fund.

While not legally required, an employer can voluntarily report the “medical only” COBRA rate provided by the Benefits Fund on the W-2. The IRS Affordable Care Act Tax Provisions Home Page states that the amount reported does not affect tax liability, as the value of the employer excludible contribution to health coverage continues to be excludible from an employee's income, and it is not taxable. This reporting is for informational purposes only, to show employees the value of their health care benefits.

For additional information see the article on the IRS website: Form W-2 Reporting of Employer-Sponsored Health Coverage


 

 

 
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