Veterans Rights; Employer

Obligations; E-Verify

ACA

Reporting

By: Lawrence P. Postol, Vice President For Legislative Affairs

Lpostol@seyfarth.com
Veterans Rights
I am writing this article on Veterans Day, and in addition to reflecting on the price of
freedom, it is a good day for HR to reflect on the rights of Veterans. Veterans Day initially was
conceived as a day to commemorate the end of World War I, and has evolved into an annual
celebration to honor those who have served in the U.S. Armed Forces.
Employers should always be aware of their obligations under the Uniformed Services
Employment and Reemployment Act (USERRA), which both protects the job rights of
individuals who voluntarily or involuntarily leave employment positions to undertake military
service or certain types of service in the National Disaster Medical System and prohibits
employers from discriminating against past and present members of the uniformed services, and
applicants to the uniformed services. This legislation covers ALL employers, and gives
employees a nearly absolute right to take a leave of absence for military service. Upon returning
from USERRA leave, employees are entitled to job restoration under a complicated
reemployment scheme called the escalator principle. Under this principle, each returning
service member [must] be reemployed in the position the person would have occupied with
reasonable certainty if the person had remained continuously employed, with full seniority.
The Family and Medical Leave Act (FMLA), another federal statute, contains Military
Family leave provisions that were added to the FMLA in 2008. These provisions cover
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Qualifying Exigency Leave, which cover any qualifying exigencyarising out of the fact
that the spouse, or a son, daughter, or parent of the employee is on active duty (or has been
notified of an impending call or order to active duty) in the Armed Forces in support of a
contingency operation, and Military Caregiver Leave, which permits up to 26 workweeks of
unpaid leave during a single 12-month period to care for an injured or seriously ill service
member of veteran.
In addition to USERRA and the FMLA, which are federal statutes, a number of states,
such as California and Illinois, have laws protecting employees who are or were members of the
armed forces.
Veterans suffering from a disability will likely be protected under the Americans with
Disabilities Act (ADA), especially related to PTSD - post traumatic stress disorder. According
to the EEOC, it is illegal for an employer to refuse to hire a veteran because[he or she] has
PTSD, because [he or she] was previously diagnosed with PTSD, or because the employer
assumes [he or she] has PTSD. Of course, this assumes the veteran can perform the essential
functions of the job, with or without reasonable accommodations. Employers are also limited
under the ADA in the type of medical information they can obtain from any employee, including
veteran - for example, no medical information can be obtained until a tentative job offer is made,
and any medical information must be kept confidental. Finally, absent undue hardship, disabled
military veteran applicants and employees are entitled to reasonable accommodation to apply
for jobs, to perform their jobs, and to enjoy equal benefits and privileges of employment.
Employer ACA Reporting Obligations
The IRS recently provided guidance on the reporting obligations of employers under the
ACA.

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Form 1094-C and 1095-C Reporting

Applicable large employers (ALEs) must file annual ACA reports with the IRS providing
information on offers of coverage made to full-time employees, using IRS Forms 1094-C and
1095-C.

The ACA defines an ALE as having an average of at least 50 full-time or full-time

equivalent employees. For employers with 50-99 full-time or full-time equivalent employees,
there is transition relief available from the Employer Mandate for 2015, but such employers must
still complete Forms 1094-C and 1095-C. Also, employers that are not ALEs but sponsor selfinsured health plans would still have reporting obligations as health coverage issuers under
Section 6055, as explained below.
Related employers within a controlled group need to be aggregated for determining the
number of full-time or full-time equivalent employees employed by an ALE for the purpose
of determining ALE status (for example, if a parent company has 80% or more ownership
interest in a subsidiary). The final instructions refer to these corporate families as an Aggregated
ALE Group and each ALE within the Aggregated ALE Group is an ALE Member.
Each employer with a separate employer identification number (EIN) that is an ALE or
an ALE Member is responsible for reporting. In some cases, related employers with separate
EINs participate in the same self-funded group health plan. Despite having a single self-funded
group health plan providing the coverage, Form 1094-C and 1095-C will need to be completed
for each employer EIN for the full-time employees of that employer. Each ALE will also need to
report the names and EINs of other entities in the ALEs controlled group (referred to as the
Aggregated ALE Group) on Form 1094-C.
The final 2015 instructions clarify that, when an employer is determining whether it is
subject to the employer shared responsibility rules (the Employer Mandate), it should

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disregard an employee for any month in which the employee is covered under TRICARE or
Veterans Administration coverage, consistent with The Surface Transportation and Veterans
Health Care Choice Improvement Act of 2015.
Decide Whether to Outsource ACA Reporting
Employers need to collect a significant amount of data and information from payroll,
employee benefits departments, benefit enrollment systems, and third party vendors. All this
information will need to be compiled onto the Form 1094-C and Form 1095-C. Accordingly,
Employers will need to decide if they have the resources internally to complete this undertaking
or whether they need to engage a third party to prepare the ACA reports.
For those employers that intend to outsource the ACA reporting, third party vendors will
need to be selected immediately and contracts finalized to allow enough time to load workforce
data and test the program software for preparing Forms 1094-C and 1095-C, if needed.
Consult Advisors Regarding Reporting Questions
The rules for ACA reporting are quite detailed, and different reporters might be subject to
different special rules (many of which are beyond the scope of this alert). ALEs would be wise to
ramp up their reporting preparation efforts, if they have not already done so, and to review the
following guidance with their advisors, staff, and vendors:
2015 Form 1094-C (https://www.irs.gov/pub/irs-pdf/f1094c.pdf)
2015 Form 1095-C (https://www.irs.gov/pub/irs-pdf/f1095c.pdf)
2015

Instructions

for

Forms

1094-C

and

1095-C

(https://www.irs.gov/instructions/i109495c/ar01.html)
Section 6056 Regulations (http://www.gpo.gov/fdsys/pkg/FR-2014-03-10/pdf/201405050.pdf)

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 IRS Publications 5164 and 5165, and the AIR Submission Composition and Reference
Guide

[all

related

to

electronic

filing]

(https://www.irs.gov/for-Tax-Pros/Software-

Developers/Information-Returns/Affordable-Care-Act-Information-Return-AIR-Program)
IRS Publication 5223 [related to the use of substitute forms and statements]
(https://www.irs.gov/pub/irs-pdf/p5223.pdf)
Develop a Plan for Filing IRS Reports and Furnishing Statements to Individuals
The Forms 1094-C and 1095-C for the 2015 calendar year need to be filed with the IRS
by February 29, 2016, if filing on paper, or March 31, 2016, if filing electronically. Employers
will need to furnish the Form 1095-C to each full-time employee by February 1, 2016.
E-Verify Preservation Of Records
U.S. employers enrolled in E-Verify -- the electronic system of employment eligibility
verification -- should prepare to download and preserve all E-Verify data submitted to U.S.
Citizenship and Immigration Services (USCIS) before January 1, 2016.
On an annual basis, USCIS must dispose of E-Verify records that are 10 years old every
January 1st

in order to comply with the National Archives and Records Administrations

disposal requirements. To allow E-Verify users to preserve their 10-year-old records, USCIS has
therefore created a new Historic Records Report.
E-Verify participation, however, does not allow an employer to dispense with Form I-9
(Employment Eligibility Verification) requirements. All employers must properly complete a
Form I-9 for every employee hired on or after November 6, 1986. Employers are also required
to a retain a completed Form I-9 for either three years after the employees date of hire or one
year after the employees date of termination, whichever date is later.

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While the creation and retention of Form I-9 records by employers is mandatory for all
businesses, participation in E-Verify is voluntary in most situations -- unless the company is
located in a state requiring enrollment in E-Verify or the employer is a party to a federal contract
containing a mandatory E-Verify enrollment provision.
E-Verify access is available to business entities which sign a Memorandum of
Understanding with U.S. Department of Homeland Security (DHS). The E-Verify system
compares information from an employees Form I-9 against data held by DHS and the Social
Security Administration in order to confirm the individuals identity and employment eligibility.
Two federal agencies are authorized to investigate and enforce compliance with U.S.
immigration laws governing the worksite -- The Justice Departments Office of Special Counsel
for Unfair Immigration-Related Employment Practices (OSC) investigates employers suspected
of violating provisions of the Immigration Reform and Control Act which prohibit a variety of
unlawful forms of discrimination, while the DHS component, U.S. Immigration & Customs
Enforcement (ICE), investigates employer-compliance practices in the completion and retention
of Form I-9. While conducting their investigations, both the OSC and ICE routinely demand to
review the employers E-Verify records.
To comply with orders or subpoenas issued by ICE or the OSC, and to preserve important
employee data in the ordinary course of business, employers enrolled in E-Verify with records
created on or before December 31, 2005 should download the new Historic Records Report
and do so no later than the last day of 2015. The report will include all transaction records for
cases more than 10 years old. The report will also contain information about all E-Verify queries
which will otherwise be automatically purged from the database on January 1, 2016.

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When logging into E-Verify, employers will find instructions on how to download the
report, export it to Excel, and save it externally. Only cases associated with the particular
Employer or E-Verify Employer Agent ID of the user account will be displayed in the report.
Note that employers using the service of a vendor of I-9 electronic signature and storage
software may instead be able to access the same historic data from their vendor.

2015 by Lawrence Postol

Mr. Postol is the Vice President for Legislative Affairs on the NOVA SHRM
Board, and a partner in the Washington, D.C. office of Seyfarth Shaw LLP. If you
have any questions about the information in this article, you may e-mail Mr. Postol
at Lpostol@seyfarth.com or call him at 202-828-5385.
Disclaimer: This newsletter does not provide legal or other professional
services. This newsletter is made available by the lawyer publisher for educational
purposes only as well as to give you general information and a general
understanding of the law, not to provide specific legal advice. By reading this
newsletter you understand that there is no attorney-client relationship between you
and the newsletter publisher. The newsletter should not be used as a substitute for
competent legal advice from a licensed professional attorney in your state.

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