ACA Reporting Compliance for Multiemployer Plans

The Internal Revenue Service (IRS) has tried to simplify reporting for multiemployer plans and contributing employers. They recently issued the new forms and instructions to be followed while implementing the reporting requirements of the Affordable Care Act (ACA) which are designed to make sure that plans, participants and employers are all playing by the new rules and penalizing those who aren’t. The first reports aren’t due until early 2016 but it is essential to begin preparing now for compliance with the new reporting requirements. 

A multiemployer plan is an employee benefit plan maintained under one or more collective bargaining agreements to which more than one employer contributes.  These collective bargaining agreements typically involve one or more local unions that are part of the same national or international labor union and more than one employer. 

A special transition rule under the ACA applies where an applicable large employer (ALE) is required by a collective bargaining agreement or an appropriate related participation agreement to make contributions, with respect to some or all of its employees, to a multiemployer plan that offers, to individuals who satisfy the plan’s eligibility conditions, coverage that is affordable and provides minimum value, and that offers coverage to those individuals’ dependents.

Because ACA reporting rules are complex and potentially burdensome the following is an outline of a suggested approach for dealing with the reporting requirements as they relate to multiemployer plans:

1. Review IRS forms and instructions for ACA reporting. Employer shared responsibility (ESR) information statements (Form 1095-C) must be furnished to each “full-time” employee, as defined by the ACA. All ESR information statements for the year are bundled together and filed with the IRS with an ESR transmittal form (Form 1094-C).

2. Determine who will handle reporting. The multiemployer plan may, but is not required to, submit ESR reports and statements on behalf of contributing employers. Under the final rule, contributing employers may fulfill the reporting requirements with respect to the employees for whom contributions were made to the multiemployer plan. If the multiemployer plan administrator prepares the returns for reporting the contributing employer would need to prepare returns pertaining to its remaining full-time employees not eligible to participate in the multiemployer plan. Plan trustees and administrators must decide which approach is preferred.

3. Reporters should designate their contact person. Each multiemployer plan will need to determine who will serve as its designated contact person for minimum essential coverage (MEC) reporting purposes. The contact phone number may provide an automated response to inquiries as long as the caller is able to reach a person during the call, and the reporter may designate a third party to be the contact person. Contributing employers will need to determine who will serve as their designated contact for ESR reporting purposes as well.

4. Verify information collection capabilities with staff and contributing employers. The multiemployer plan office should consult with the plan’s administrator to determine what information must be obtained or provided under MEC and ESR reporting rules. A plan should be developed for exchanging information between employers and the plan. The information to be exchanged between a multiemployer plan and its contributing employers will depend on whether the employers decide to prepare their own ESR reports for all of their own full-time employees, and on whether the IRS ultimately decides to require contributing employers eligible for the multiemployer plan transition rule to complete lines 14 and 15 on Form 1095-C.

Although the filing deadline is still a long way off, plans and employers would be well-advised to begin planning for compliance now to ensure that the information needed can be easily captured and reported before the deadline.

Have questions? Reach out to us. After all, experts like Paypro are navigating the difficult legal landscape every single day, and can provide trusted guidance and insights that keep organizations like yours compliant and focused on what they do best.