USA: Alliant Compliance Fast Facts & FAQ – July 22 2016

The following information on compliance was provided to us by Asinta’s partner in the United States, Alliant.

TIN Errors in ACA Reporting Submissions
One common error an employer received from the AIR system when submitting a packet of Form 1095-Cs was an error reporting that a Form 1095-C was submitted with an incorrect taxpayer identification number (TIN). This error indicates an individual name and TIN does not match the IRS database. An employer will need to at a minimum verify and correct the name and TIN for each individual included on the Form 1095-C.

For TIN/SSN mismatches the employer should reach out to the employee. If the employer receives the correct number they should file updated or corrected form with IRS. Employers will not be subject to penalties for the inclusion of an incorrect TIN if they comply with the requirements below:

1. The initial solicitation is made at an individual’s first enrollment or, if already enrolled on September 17, 2015, the next open season,
2. The second solicitation is made at a reasonable time thereafter, and
3. The third solicitation is made by December 31 of the year following the initial solicitation.

Employers are not required to solicit a TIN from an individual whose coverage is terminated.

For information on how employers file a corrected form, please view the instructions here starting on page 4. Corrected forms should be filed as soon as possible.

DOL Increases Penalties for Health Plan Violations
The DOL has issued regulations that increase the monetary penalties for a wide range of benefit-related violations. Numerous penalties were becoming less effective and less effective because the penalty amounts had not kept up with inflation. Because of that, Congress enacted legislation in 2015 requiring an initial “catch-up” adjustment to specified penalty amounts, followed by smaller annual adjustments. These regulations establish the catch-up amounts. Future adjustments will be made by January 15 of each year, starting in 2017. A summary of the monetary changes to benefit plans is below along with links to further information.
Form 5500. The maximum penalty for failing to file Form 5500 (will increase from $1,100 to $2,063 per day that the Form 5500 is late.
Group Health Plans
SBC: The maximum penalty for failing to provide the SBC will increase from $1,000 to $1,087 per failure.
GINA: Violations of GINA may result in penalties of $110 per participant per day, up from $100.
Medicaid or CHIP: Maximum penalties relating to disclosures regarding the availability of Medicaid or CHIP assistance will increase from $100 to $110 per day.
Multiple Employer Welfare Arrangements (MEWAs). Penalties for failure to meet applicable filing requirements, which include annual Form M-1 filings and filings upon origination, will increase from $1,100 to $1,502.

The increased amounts apply to penalties assessed after August 1, 2016 with violations occurring after November 2, 2015. Other penalties increased by the regulations include those for failure to provide certain information requested by the DOL, failures not corrected within specified time periods, and defined benefit plan compliance failures. For more information, please visit the links below:
Interim final rule
EBSA Fact Sheet
DOL FAQs

New Paid Sick Leave Ordinances in Los Angeles, San Diego, Chicago
Los Angeles, San Diego and Chicago are joining the ranks of cities that require paid sick leave.

The Los Angeles ordinance was approved by the City Council in April 2016, and is expected to take effect as early as July 2016. Under the ordinance, employees who have worked at least 30 days for the same employer within a year would be entitled to paid sick leave. Leave will accrue at a rate of 1 hour of sick leave for every 30 hours worked. The City Council rejected a proposed small employer exemption, though employers with 25 or fewer employees will have a delayed effective date (July 2017).

San Diego passed an ordinance in June 2016 that will have immediate effect upon approval by the City Council (expected sometime this month). The ordinance will apply to employees who work at least 2 hours within the City of San Diego in one or more calendar weeks of the year, and who would normally be entitled to California minimum wage. Employers must provide these employees with one hour of sick leave for every 30 hours worked by the employee within the boundaries of the City.

Chicago’s ordinance takes effect on July 1, 2017. A “covered employee” is an employee who performs at least two hours of work for an employer in any two-week period while physically inside of the geographic boundaries of Chicago. A “covered employer” is any entity or person that employs at least one “covered employee” while maintaining a business facility within the geographic boundaries of the city and being subjected to city license requirements.

This is a rapidly changing area of the law, and now is a good time to remind clients that they should be working with employment law counsel to ensure compliance with federal, state, and municipal leave requirements.

FAQ of the Week
Q. How do I get my client on the compliance distribution list?
A. The compliance distribution list is pulled from BenefitPoint. Client contacts loaded into BenefitPoint will be included in compliance communication including alerts, webinar invites and insights. If you wish for a client not receive communication from the compliance department, simply select ‘compliance alert’ or ‘webinars’ under the ‘do not send’ option while loading the contact into BenefitPoint.

 

Thanks again to Alliant for providing us with this information.