Employer Notices of ACA-Subsidized Employees

Upcoming Notices of ACA-Subsidized Employees
This spring, employers will begin to receive notices from the Affordable Care Act Exchanges if they have any employees that have received government-subsidized health insurance through the Exchanges. These notices will provide an employer the opportunity to contest any penalties for employees receiving subsidized coverage through the Exchanges.
What are the Potential Penalties?
The notices will identify any employees who received an advance premium tax credit.  If a full-time employee of an applicable large employer receives a premium tax credit for coverage through the Exchanges in 2016, the employer will be liable for the employer shared responsibility payment.  The penalty if an employer doesn’t offer full-time equivalent employees (FTEs) affordable minimum value essential coverage is $2,160 per FTE (minus the first 30) in 2016. If an employer offers coverage, but it is not considered affordable, the penalty is the lesser of $3,240 per subsidized FTE in 2016 or the above penalty.
Appeal Process
If an employer receives a notice that it believes is in error, for example – because an employee has claimed a subsidy they are not entitled to – the employer may appeal the notice from the Exchanges by proving they offered the employee access to affordable minimum value employer-sponsored coverage, therefore making the employee ineligible for the subsidy.
An employer appeals by asserting that it provides the employee access to affordable, minimum value employer-sponsored coverage or that the employee is enrolled in employer coverage. The employer has 90 days from the date of the notice to request an appeal.

About John McMorrow

John has 30 years of experience counseling public- and private-sector for-profit and not-for-profit employers and their affiliated business entities, management, human resources professionals, third-party administrators and fiduciaries with respect to the laws that apply to executive compensation arrangements and workforce benefit programs and policies. He works comfortably with HR professionals, general counsel and boards of directors. In 1998, John received a National Performance Review Award from Vice President Al Gore for his assistance in developing and writing the regulations under Section 2043 of ERISA for the Pension Benefit Guaranty Corporation.
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