The ACA requires each Health Insurance Marketplace (including federally facilitated Marketplaces and state-based Marketplaces that use the healthcare.gov platform) to notify any employer whose employee enrolled in Marketplace coverage and was found to be eligible for advance payment of premium tax credits and cost sharing reductions.
Which employers will be notified through the employer notice program in 2016?
The Marketplaces will send notices to employers whose employees received premium tax credits for at least one month in 2016 and whose employees provided the Marketplace with a complete employer address. The notice will identify the specific employee and include a statement that the employee is enrolled in Marketplace coverage with a premium tax credit.
When will employers start to receive notices?
The notices will be sent in batches. The first batch will be sent in spring of 2016. It will include employers whose employees enrolled in Marketplace coverage with a premium tax credit during Open Enrollment, which ends on January 31, 2016. Additional batches of notices will be sent throughout 2016 as additional enrollments occur.
Will employers be liable for a penalty if a full-time employee receives a premium tax credit for coverage received (being received) through a Marketplace in 2016?
Yes, Applicable Large Employers (ALE) (with 50 or more full-time/full-time equivalent employees) will be liable for the penalty unless the employer offered adequate coverage to its full-time employees and dependents (children). Adequate coverage must meet minimum value and affordability requirements.
May an employer appeal an employer notice?
Yes. An employer may specify that it provides its full-time employees access to affordable, minimum-value, employer-sponsored coverage or that the employee is enrolled in employer coverage. In those situations, the employee is ineligible for a premium tax credit. If the employer’s appeal is successful, the Marketplace will send a notice to the employee advising the employee to update the employee’s Marketplace application to show that the employee has access to or is enrolled in other adequate coverage. The employee’s failure to update the application may result in a tax liability for the employee.
What is the appeal process?
An employer has 90 days from the date of the notice to request an appeal. An employer appeal request form will be available here.
Will employers receive notices for premium tax credits received by full-time employees for Marketplace coverage in 2015?
No. The Marketplaces are not issuing notices for 2015 coverage. However, the IRS is independently determining ALE liability for penalties without regard to whether the Marketplaces issue a notice. Liability may apply to ALEs with 100 or more full-time employees in 2015 if a full-time employee received a premium tax credit.
How should employers prepare in the event a notice is received?
- Develop a process to identify the notices, review them, and take appropriate action, including appealing any inaccurate determinations.
- Ensure plan information is easily available to employees so that employees who purchase coverage through the Marketplace are giving accurate plan options and cost information to the Marketplace.