Over the course of the year, many employers participated in a widespread panic over notices mailed to them from the ACA’s Health Insurance Marketplace. These notices summarized that an employee from their company was eligible for a tax subsidy (in the form of a Premium Tax Credit or Cost Sharing Reduction) for coverage purchased from the Marketplace.
The notice further states an employer may be penalized for such actions in the form of a shared responsibility payment. If the employer believes this notice is in error, that employer can file an appeal. While these notices were somewhat vague and, perhaps all that the employers really read was the word “PENALTY,” the Marketplace has now changed its approach with another notice. These new notices, sent over the last few weeks, state a few more clearly etched out reasons for the employee tax subsidy.
These reasons expressed in the new notice include that (a) an employee was not offered minimum essential coverage, (b) if they were it wasn’t affordable, it didn’t provide minimum value, or (c) the wait time for eligibility of enrollment was too lengthy. One of these reasons may have caused an employee to purchase coverage through the Health Insurance Marketplace and received a tax subsidy.
While the sentiment may be the same as previous notices, the information in the new releases are far more explanatory. However, if you as an employer feel this notice is somehow erroneous, then an appeal may be necessary.
Appeals can apply to situations where the employee was erroneously determined to be eligible for a tax subsidy (either as an advanced Premium Tax Credit or Cost Sharing Reduction) or the employee was not classified as a full-time employee for the applicable large employer. This is yet another reason for the importance of stamping out misclassification in employees. So, what are the next steps to appeal?
Head over to HealthCare.gov to complete an Employer Appeal Request Form or a letter with the equivalent information as the form. Such appeals must be filed within 90 days of the receipt of notice. A helpful tip: while many employers have software to assist in generating forms for information reporting, this is not one of them and should be handled by a professional with ACA expertise.
Further, under the ACA (ACA Section 1558, added to Section 18C to the Fair Labor Standards Act) there is an explicit anti-retaliation clause, whereby employers may not discriminate against those employees who have received such a tax subsidy. Regardless of whether your notice is correct or your appeal is denied, you must not retaliate against your employee. The cost could be much more than that proposed shared responsibility payment.
