The Health Insurance Exchange (Marketplace) has announced that they will begin to send out notices to employers, small and large, to advise the employer on which employee’s received subsidies through either the Federally-Facilitated Marketplace or a State-Exchange Marketplace in 2015. Section 1411 of the Affordable Care Act requires the government to verify the eligibility of those who received subsidies through individual plan on the Marketplace. A subsidy is an advanced premium tax credit or cost sharing reduction that is based upon income and other factors.
Why am I receiving these notices?
The Affordable Care Act requires individuals to meet certain requirements in order to be eligible for a subsidy. Part of that eligibility is whether the employee is enrolled or offered a qualifying group health plan through their employer. These notices are only from the Marketplace to verify the eligibility of that individual.
Will all employers receive these notices?
No. It is a random verification process that will go out to employers. You could receive a notice that lists only one employee or multiple employees. If you are an employer with multiple locations, the employee may have listed the location in which they physically work. Please make sure that you notify those locations and instruct them on what to do with the notice when you receive it.
What is included on the notice?
The notice will only include the employee’s name, dates of coverage and whether they received a subsidy or not. It will not include the amount of subsidy received. It will also include the Employer’s Right to Appeal and a reminder of the Play or Pay rule for applicable large employers (usually those with 50 or more full time employees). These notices could come from the Federally Facilitate Marketplace or the individual State Run Marketplaces.
(NOTE: This process is not part of the IRS Code 4980H Play or Pay, however it will be related later on) View a copy of the notice.
What should I do with it?
When you receive a notice, you should compare the information to that in your employment and payroll records, making sure the information is correct. Remember it is illegal to discriminate and retaliate against employee’s who receive a subsidy. It is a good practice to separate the internal functions, keeping these types of situations away from those making employment decisions.
If you see anything incorrect, or if your employee was offered benefits or enrolled in benefits, you should file an appeal.
Why should I file an appeal?
The Play or Pay rule doesn’t apply to small employers (less than 50 full time equivalent employees) however, they should still file an appeal to alert the Marketplace if an employee was enrolled in a group health plan and not eligible for a subsidy.
If you are a large employer (more than 50 full time equivalent employees) then you should file an appeal, if necessary.
This will help alleviate any later penalties or actions from the IRS.
How do I file an appeal?
The process for filing an appeal will be on the notice. These states have adopted the federal appeals process:
District of Columbia
Click here to view a copy of the Employer Appeal Request Form