As most large employers are now well aware, the trigger for penalties imposed by the Patient Protection and Affordable Care Act (ACA) is receipt of financial assistance in the form of an advanced premium tax credit and/or a cost sharing subsidy by a full-time employee who was not offered affordable, adequate employer sponsored coverage. The ACA requires notification to employers when an employee enrolls in a qualified health plan via an Exchange (Marketplace) and receives such financial assistance.
The Department of Health and Human Services (HHS)’s Centers for Medicare and Medicaid Services (CMS) will soon begin to notify employers when an employee has enrolled in a Federal Exchange coverage and received financial assistance. In 2016, employers will receive a notice if an employee received an advance premium tax credit for at least one month in 2016 and if the Federal Exchange has a complete address for the employer. A copy of the sample subsidy notice is available here.
If the employee identified on the notice incorrectly stated that he or she was not enrolled in employer sponsored coverage or was not offered adequate or affordable employer sponsored coverage, the employer may appeal. The IRS will independently determine any liability for the Employer Mandate penalty, but a successful employer appeal may prevent an incorrect report by the Exchange concerning an employee’s eligibility for coverage. Employers have 90 days from the date of the notice to request an appeal. More details about the employer appeal process and a download of the employer appeal request form is available here.
Employers in states with State Exchanges should note that each state may have a different notification and/or appeal process. A State Exchange may have its own appeals process or it may follow the federal appeals process established by HHS. California, Maryland, Colorado, Massachusetts, District of Columbia, New York, Kentucky, and Vermont have announced that they will utilize the federal appeals process. Employers in other states with State Exchanges should follow the appeal instructions provided by that state.
For more information about this and other regulatory developments, visit our website at www.HCReducation.com.