Re: Reporting Service for Affordable Care Act Required IRS Reporting-Codes 6055 & 6056

November2015

Re: Reporting Service for Affordable Care Act Required IRS Reporting-Codes 6055 & 6056

Dear Friends of Key Benefit Administrators;

This letter updates KBA’s previous memos on the IRS required reporting onIRS forms 1094 and 1095 that must be filed in 2016 for calendar year 2015. KBAwill now be able to offer to assist self-funded clients with the reporting requirements required by the Affordable Care Act (“ACA”) on a limited basis.

The ACA addedsections 6055 and 6056 to the Internal Revenue Code. These provisions apply to employersthat average 50 full-time, plus full-time equivalent employees in the preceding year (called an “applicable large employer” or “ALE”). These provisions require anemployerthat sponsors a self-insured health plan report to the IRS and to employees whether it offers a health plan that provides minimum essential coverage (“MEC”) or an affordable minimum value plan (“MVP”) as defined by the ACA. The reports will be made using IRS Forms 1094 and 1095.

Because KBA does not have all the employment information that is necessary to help an employer determine if it is an ALE, we will be unable able to assist our clients with determining if they meet the definition of an ALE. Please reach out to your legal counsel or accountant for that information or go the IRS website for help at: .

There are two classes of self-funded employers that must make a filing. They are:

Self-funded with under 50 employees:

Send employees Form 1095-B by January 31, 2016

File Forms 1094-B and Form 1095-B with the IRS electronically by March 31, 2016

Self-funded 50 and over employees:

Send employees Form 1095-C by January 31, 2016

File forms 1094-C and 1095-C with the IRS electronically by March 31, 2016

If you choose to have KBA assist you with the full service filing of these forms, below is a list of services that KBA will provide:

1. KBA will complete and file required IRS Forms1094 and 1095 using eligibility and coverage information as reported to, and maintained by, KBA each month by an employer group.
2. KBA will identify areas of information it does not possess and request that information from the employer. This will be a time sensitive deliverable from the employer. Failure to timely provide the requested information will void KBA’s agreement to provide the full Reporting Service.
3. KBA will mail to all employees (all that were employed during 2015) the required employee coverage report by the end of January, 2016
4. KBA will electronically file required forms with the IRS no later than March 31, 2016.

Asan alternative to providing the fullfiling service, KBA will offer to provide a 2015 eligibility information file to employers that are preparing and filing the required reports themselves or through a separate entity such as a payroll company. The file will be capable of being manipulated by the recipient.

KBA’s services will not include the following services

1. KBA will be unable provide a front end eligibility determination service to help an employer determine whether it is an Applicable Large Employer (ALE) subject to filing the required forms.
2. KBA will be unable to provide a front end eligibility determination service to help an employer determine which employees are full time employees for whom the employer must make a report to the IRS or to who it must issue an employee coverage report.
3. KBA will be unable to provide the reporting service to any client where KBA does not have a consistent track record of receiving accurate eligibility information from an employer or a third party eligibility reporting company.

If you wish to have KBA provide you with coverage information that helps you create and file your own forms or if you want KBA to create and file the forms on your behalf, you must reply to this email with your selection from the two below options, to, by Friday, November 20th, 2015.

The fee for these services will be as follows:

• Report of all eligible month by month, member information for self-filing:$1,750. Additional programming by KBA to meet custom needs of a recipient will be billed at an additional $200 per partial or full hour.

• Report and completion and filing of forms 1094 & 1095 (including mailing to member’s home address on file): $2,500 per employer ID number plus $9 for each mailed member letter. The $2500 fee will be due up front and the “per ID number” mailing fee will be billed following the mailing of employee forms.

Again, the deadline for electing oneof these services is November 20th, 2015. After that time we will be unable to offer or provide these services.

Sincerely yours,

Client Services

Key Benefit Administrators

****Note: The intent of this letter is to provide you with general information. It does not address all your organization’s specific issues. It should not be construed as, nor is it intended to provide, legal or taxation advice. Questions regarding specific issues should be addressed by your organization’s legal counsel.