While much of employers' attention surrounding the Affordable Care Act (ACA) has been on compliance, an important piece that HR and benefits professionals can't overlook is employee education.
This is especially true when it comes to the 1095 form, which includes important information about health care coverage offered and/or provided by employers to their employees. The 1095 may be used by the IRS to determine if an employee is subject to fines under the individual mandate and/or to determine an employee's eligibility for a subsidy to help pay for health care.
January 2017 will mark only the second time that employees will receive a 1095, so it should be expected that many don't yet understand the importance of this form. And, since the IRS stated that filing extensions will not be granted to employers this year, employees will be receiving 1095s by January 31 – the same time frame that various other tax forms will arrive. These factors create a scenario that's ripe for confusion.
It's essential that HR and benefits professionals take steps to educate employees on this form's significance. Here are four key steps that you'll want to take to prepare for ACA Form 1095 season:
|Step 1: Build your communication strategy & plan
Creating a plan to get ahead of the confusion around this new form will help you and your employees prepare for tax season.
Gather your team members, and collectively decide what you'd like to communicate to your employees and when. Build a plan that answers key questions like:
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For our employees, what messages will be most effective and resonate?
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Should we deliver different messages to different types of employees, such as full-time and part-time?
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What were the most commonly asked questions last year about the 1095 form?
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Which delivery channels best suit our employees and culture (post cards, emails, text reminders, etc.)?
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Do we need to have any education or communication materials produced and/or printed?
Be sure to think through and identify any potential barriers to your plan's success such as geography, holiday seasons, busy business periods, etc. Given the January 31, 2017 deadline to have 1095s to employees, a suggested time frame for this step is October through November.
Step 2: Begin educating employees
Start with the basics! Use your identified communication channels to begin educating your employees on frequently asked questions such as:
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What is the 1095 form?
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Why will I get this form?
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What should I do with this form when I receive it?
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Why did I receive more than one 1095?
Consider providing reference materials (posters, FAQs, etc.) that provide this information so that employees can use them as needed. Include information about the 1095 in new hire packets, open enrollment materials, and on your company's intranet.
A suggested time frame for this step is November through December.
|Step 3: Provide more detailed information
Continue to educate your employees! Build on the basics you've covered previously, and introduce new information. Consider answering more in-depth questions such as:
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How will the 1095 affect my taxes?
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What does the information on this form mean?
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What's the difference between a 1095-A, 1095-B, and 1095-C?
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Whom should I contact with questions?
A suggested time frame for this step is December through the end of January. Don't forget to continue to communicate the information from Step 2, also.
|Step 4: Prepare for more questions
Even though you've built a solid employee education and communication plan, you'll want to be prepared to answer questions as they come in. Setting up an email account or hotline to provide answers to 1095-specific questions has proven successful for many employers. Be sure you and your team think through logistics and process considerations such as:
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Who will answer detailed questions about the 1095 form, and how can employees reach them?
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What if an employee didn't receive a 1095 but was enrolled in coverage?
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How can employees request an additional copy of their 1095-C?
Because employees will be filing their income taxes through April 15 (or later!), it's a good idea to have your team (or designated vendor) available to answer questions through the end of filing season.
To access a 1095 toolkit of resources to make your 1095 season a success, click here.
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