Many employers received notices last week about employees who are receiving subsidies on the individual exchange. This matters if you are classified as an ALE "Applicable Large Employer" as penalties may be assessed.
- If the employee is receiving a subsidy because you did not offer them coverage, then there is nothing you need to do.
- If the employee is receiving a subsidy because you did not offer a plan that met minimum essential coverage or affordability, then there is nothing you need to do.
- If you did offer coverage that was affordable and met minimum essential coverage, then you have 90 days within which to appeal.
Here is a link to that form:
https://www.healthcare.gov/downloads/marketplace-employer-appeal-form.pdf
If you are an ALE and don't know what I am talking about in the above 3 points, then you ABSOLUTELY need to talk to me, your current broker, or your Employment Attorney.
Below is a newsletter about this from a very good Employment Attorney (if you need one). Larry Grudzien (larry@larrygrudzien.com, 708-717-9638).
From the Desk of Larry Grudzien
What's up with the Notice from the Marketplace?
July 3, 2016
Last week, many employers received notice from the
Marketplace indicating one of their employees was qualified for advance premium
tax credits. Many are asking what is
this notice and how should deal with it. The following explains what the notice
is and what steps an employer should take.
What is this Notice?
Under Section 1411(e)(4) of the Affordable Care Act, a
Marketplace must notify an employer if any of its employees is determined to be
eligible for a premium assistance credit (or the cost-sharing subsidy) because
the employer does not provide minimal essential coverage through an
employer-sponsored plan, or the employer does offer such coverage but it is not
affordable.
Under 45 CFR Section 155.310(h), the notice must:
- identify the employee, providing the minimum necessary
personally identifiable information;
- state that the employee has been determined eligible for
advance payments of the premium tax credit, listing the potential reasons for
the determination (instead of the actual reason) and without providing tax
return information;
- indicate that, if the employer has 50 or more full-time
employees, the employer may be liable under the employer responsibility rules
of Code Section 4980H; and
- notify the employer of its right to appeal the
determination.
Under Section 1411(e)(4)(B)(iii) of the Affordable Care Act,
a Marketplace must provide this notice regardless of the size of the employer
even though the employer mandate penalties only apply to applicable large
employers (ALEs).
In addition to the above notice, a Marketplace may also
contact the employer to determine whether its employees are enrolled in or are
eligible for affordable, minimum value coverage under an eligible
employer-sponsored plan, as provided in 45 CFR Section 155.320(d)(3)(iii)(D).
What should an employer do after it receives this notice?
The employer may appeal a determination that an employee is
eligible for advance payments of the premium tax credit based in part on a
finding that the employer did not offer qualifying coverage to the employee, as
provided in 45 CFR Section 155.310(h). While a Marketplace's determination does
not itself trigger the employer mandate penalties (those penalties are assessed
by the IRS), employers offering coverage that should not result in the receipt
of advance payment of premium tax credits may wish to use the appeals process
to ensure, as much as possible, that their employees are not mistakenly
receiving such payments.
The appeal may be conducted by either a Marketplace or by
HHS if a Marketplace has not established an appeals process.
A Marketplace must allow employers to request an appeal
within 90 days from the date of the notice from the Marketplace and permit
employers to submit relevant evidence to support the appeal, as provided in 45
CFR Section 155.555(c). An employer may request an appeal by completing an
appeal request form. Click on link below to obtain a copy of the request form:
An employer may mail or fax an appeal request.
Under 45 CFR Section 155.555, this appeals process must give
employers the opportunity to:
- present information to a Marketplace for review of the
determination, including evidence of the employer-sponsored plan and employer
contributions to the plan; and
- have access to the data used to make the determination to
the extent allowable by law.
Under 45 CFR Section 155.555(d), once a Marketplace receives
a valid appeal request, it must:
- timely acknowledge the receipt of the request,
- provide an explanation of the appeals process,
- inform the employee of the appeal, and
- provide the employee with instructions for submitting any
additional evidence for consideration by the appeals,
Under 45 CFR Section 155.555(i)(3), the standard of this
review is a de novo review. A de novo review means a review of an appeal
without deference to prior decisions in the matter.
Under 45 CFR Section 155.555(g), as part of the review
process, the employer must be given the opportunity to:
- provide relevant evidence for review of the determination
of the employee's eligibility for advance payments of the premium tax credit or
cost-sharing reductions;
- review the information identifying the employee,
information regarding whether the employee's income is above or below the
threshold by which the affordability of employer-sponsored minimum essential
coverage is measured, and other data used to make the determination, to the
extent allowable by law.
The Marketplace's decision is required to be provided to
both the employer and employee generally within 90 days of the date the appeal
request is received, as provided in 45 CFR Section 155.555(k).
If the employer's appeal is successful, a Marketplace will
send a notice to the employee encouraging the employee to update his or her
Marketplace application to reflect that the employee has access to or is
enrolled in other coverage. Under 15 CFR Section 155.555(k), the employee has
the right to appeal the decision.
This appeal decision does not foreclose any future appeal
rights the employer may have under the Internal Revenue Code for excise tax
liabilities. While an appeal of a notice by the Exchange may be beneficial,
employers are not necessarily required to make this appeal to preserve their
rights against the later potential assessment of Code Section 4980H liability,
as provided under 45 CFR Section 155.555(k)(1)(ii).
For a copy of the employer appeals process regulations,
please click on the link below:
