Todd Praisner: July 1, 2016
Once you’ve finished filing 2015 tax forms related to the Affordable Care Act, don’t be surprised to start receiving employee exchange subsidy notices from the Health Insurance Marketplace. These notifications essentially let you know that it appears you failed to offer affordable coverage to some employees, who then purchased subsidized coverage in the marketplace. And you know what happens next when you’re identified as a large employer that didn’t offer affordable coverage: fines.
“But wait a minute,” you’re thinking. “We offered affordable coverage just like we were supposed to. Why would anyone think we didn’t? And what do we do now?”
The problem comes when one of your full-time employees decides to buy individual coverage from the Marketplace and accepts a subsidy offered to qualifying people who weren’t offered affordable coverage at work. That employee’s actions, whether taken by mistake or intentionally, flag you as a company that didn’t meet ACA requirements – hence the exchange subsidy notice from the marketplace.
The good news is you can appeal the finding. But you only get one chance, and you have just 90 days to do it, so you need to get your ducks in a row. Here are the three steps to follow to prepare your HR team to act fast.
Get Your Exchange Subsidy Notice Response Process in Place—Now
When you only have 90 days to appeal a subsidy notice, you don’t want your HR team spending half of that limited time figuring out what information they need, where to find it and what to do with it. So don’t wait until you start receiving these notices to create your process for response – do it now. You’ll need to provide proof that the employee either wasn’t eligible for ACA coverage or was in fact offered a qualifying plan. The Health Insurance Marketplace has published the appeal form that you’ll need to use along with the ACA coverage proof documentation. Because exchange subsidy notices and appeals are paper-based, your process needs to include the time it takes to make paper copies of any relevant documentation and physically mail copies, using a trackable method such as Certified Mail.
Put Your Team on Notice
Because of the limited time to appeal, your HR team needs to be on the alert for exchange subsidy notices to arrive and ready to act quickly once they do. The notices will come by mail – and it may not be obvious at a glance what they are, so it’s important to keep a sharp eye out. To further complicate matters, notices are mailed to whatever address the employee provided when applying for coverage through the marketplace. That means they may not come to the central address where the IRS or other government offices normally contact you by mail. Be sure regional and other remote offices are aware of the possibility that exchange subsidy notices may be sent to their addresses, and have a designated point of contact to whom they should forward any notices that come to them. Have a formal process in place for notifying the point of contact (email or other internal communication) and passing the notices on to them (preferably through an overnight service like FedEx).
Don’t Forget to Follow Through on Exchange Subsidy Notices
You can do everything right and still find yourself facing fines later if you’re not careful to follow through on your actions. Make sure your exchange subsidy notification process includes tracking when you received a notice, what evidence you collected to appeal it and when you sent the actual appeal. And once you know it’s been received (because you’ve confirmed delivery by Certified Mail), don’t put it out of your mind just yet. Watch the mail for acknowledgement of receipt and any requests for additional information. Keep in mind that once you’ve filed your appeal, further communications will come from the Marketplace Appeals Center rather than the Health Insurance Marketplace. Follow your exchange subsidy notice appeal all the way through to its resolution to be sure your company is in the clear.
To learn more about exchange subsidy notices, read our white paper “An Employer’s Guide to Marketplace Exchange Subsidy Notices,” and, as always, contact us for help with issues or questions related to this or any other ACA-related challenge.