Employer Appeals Of Marketplace Subsidy Notices

Under the ACA, Applicable Large Employers (ALEs) may be subject to employer shared responsibility (or pay or play) penalties if they do not offer affordable, minimum value health coverage to their full-time employees. The Internal Revenue Service (IRS) will assess these penalties if any full-time employee receives subsidies to help pay for the cost of health insurance coverage purchased through an Marketplace.

Each Exchange or Health Insurance Marketplace (Marketplace) will determine whether an individual is eligible for subsidies when he or she applies for coverage. This determination does not establish whether the individual’s employer is liable for an employer shared responsibility penalty, but it may provide a basis for the IRS to assess penalties against an ALE.

Marketplace Certifications

Each Marketplace is required to send a notice to employers regarding any employees who receive subsidies to purchase Marketplace coverage.  Marketplaces using the federal www.HealthCare.gov platform began sending the first batches of employer notices in the spring of 2016. These notices, called Section 1411 Certifications, will be sent to all employers with employees who receive a subsidy to purchase coverage through an Marketplace (including ALEs and non-ALEs).

This certification must:

  • Identify the employee;
  • Indicate that the employee has been determined to be eligible for a subsidy;
  • Indicate that, if the employer has 50 or more full-time employees, the employer may be liable for an employer shared responsibility penalty; and
  • Inform the employer of the right to appeal the determination.

Employers that receive these notices will have 90 days to file an appeal if they feel the eligibility determination was made in error.  If the employer feels the determination is correct then no additional action is needed, although it would be in the employers best interest to document any details on the determination.

Key Notes

  • Marketplaces may require paper appeals through Dec. 31, 2016.
  • Marketplaces will begin notifying employers that they may be liable for ACA penalties when their employees receive health insurance subsidies.
  • Employers have 90 days to appeal Marketplace subsidy eligibility determinations.
  • Marketplaces will be required to accept appeals online, by phone, by mail and in person beginning Jan. 1, 2017

How an employer can file an appeal

Employers will have 90 days from the Notice Date from the Marketplace to file an appeal. This appeal can be filed 2 ways :

  • Fill out the Employer Appeal Request Form
  • Submit a letter

Visit www.healthcare.gov/marketplace-appeals/employer-appeals for full details on filing an appeal.

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The information provided is for informational purposes only and does not constitute legal advice. The information above contains only a summary of the applicable legal provisions and does not purport to cover every aspect of any particular law, regulation or requirement. Depending on the specific facts of any situation, there may be additional or different requirements. This is to be used only as a guide and not as a definitive description of your compliance obligations.