HRB 119 - Best Practices for Employer Marketplace Notices (article)
Released July 11, 2016 I Download as a PDF
Many employers may be receiving marketplace notices indicating that certain of their employees have been granted premium assistance. Rumor has it that a big batch of these notices was sent out in late June. What should employers do in response to these notices?
As background, individuals whose household income falls between 100 and 400% of federal poverty level and who are not offered adequate affordable coverage by their employer, or who have not enrolled in minimum essential coverage, may be entitled to premium assistance for the purchase of health coverage. If an individual is granted premium assistance and if the individual provides the marketplace with his/her employer’s contact information, then the marketplace may notify the employer of the employee’s receipt of premium assistance. This notice then provides an opportunity for the employer to appeal the marketplace decision. For additional background information about these marketplace notices, see CBIZ Health Reform Bulletin 117, Employer Appeals - Marketplace Decisions (4/18/16) and HRB 115, Employer Notices of Marketplace Determinations (10/12/15).
These marketplace notices may be sent to employers of any size, not just those employers subject to the ACA’s employer shared responsibility provisions. It is very important to note that this marketplace notice is not a tax assessment – only the Internal Revenue Service can assess the tax owed, if applicable. An employer subject to the ACA’s employer shared responsibility provisions may be assessed an excise tax (pursuant to IRC §4980H(a) or (b)) if it fails to offer adequate and affordable health coverage to its full-time employees. However, no excise tax would be imposed if an individual enrolls in minimum essential coverage without regard to whether it is affordable.
The employer owes no tax unless and until the IRS contacts the employer. The IRS would contact the employer after the employer has filed its Forms 1095-Cs with the IRS, and the individual taxpayer has filed his/her tax return in the year following the year in question. Conversely, the marketplace notice is issued at the time the individual is granted premium assistance.
How to Appeal a Marketplace Decision
Employers can appeal a marketplace determination by completing an “Employer Appeal Request Form”, or by mailing a letter to the Department of Health and Human Services (HHS) that contains the information requested in this Form. The Employer Appeal Request Form can only be used to appeal a marketplace notice received from the federally-facilitated health insurance marketplace (healthcare.gov), or a state-based Marketplace operating in California, Maryland, Colorado, Massachusetts, District of Columbia, New York, Kentucky, or Vermont. Other state-based marketplaces may have their own notices and processes they utilize for notifying employers of the right to appeal a marketplace decision. With regard to an appeal relating to a Small Business Health Options Program (SHOP) eligibility decision, visit this website for more information: https://www.healthcare.gov/small-businesses/choose-and-enroll/appeal-a-shop-decision/.
The Employer Appeal Request Form, or letter to HHS, must be submitted within 90 days from the date of the Marketplace notice. The completed form and copies of any supporting documents must be mailed to:
Health Insurance Marketplace
Dept. of Health and Human Services
465 Industrial Blvd.
London, KY 40750-0061
In the alternative, the Form or letter, together with supporting documentation, may be faxed to a secure fax line: 1-877-369-0129.
Additional information about employer appeals to Marketplace decisions is available at this website:
Best Practices for Employers
Following are some best practice steps that employers can take in light of these marketplace notices when appealing a marketplace decision:
Maintain accurate records of all employees and their status as full-time or part-time.
Maintain records of offers of health coverage to your employees, including records of health coverage declination.
Notify internal staff, such as your HR department or affiliate offices, to watch for receipt of a marketplace notice. Educate your staff on the importance of notifying a central source, such as HR department, in the event of receiving a marketplace notice.
Remember the marketplace notice will reflect the individual’s current year status.
If the employer is subject to the ACA’s employer shared responsibility provisions (one who employs 50 or more employees) and receives a marketplace notice, review the notice and determine:
The employment status of the individual. For example, was the individual a full-time employee or part-time employee at the time in question; or, was the individual not an employee;
Whether the individual was offered adequate and affordable coverage or enrolled in minimum essential coverage of any kind; and
Whether the individual was in a limited non-assessment period such as a waiting period or an initial measurement period.
If the individual was a full-time employee at the time referenced in the marketplace notice and if an offer of adequate affordable coverage was made, or if the individual was enrolled in minimum essential coverage of any kind, the employer might want to respond to the marketplace notice. In all other instances, the employer would not want to appeal if the individual is properly entitled to premium assistance.
Be aware of the timeframe for making the appeal. The Employer Appeal Request Form or letter to HHS, together with supporting documents, must be mailed or faxed within 90 days from the date of the marketplace notice (see address and fax number above).
Maintain confidentiality. It is very important that any sensitive information contained in the notice be similarly protected in the employer’s appeal. The marketplace notice should be reviewed carefully and only the types of identifying information contained in the notice, such as truncated social security numbers, should be used in the appeal.
The information contained herein is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations. The information contained herein is provided as general guidance and may be affected by changes in law or regulation. The information contained herein is not intended to replace or substitute for accounting or other professional advice. Attorneys or tax advisors must be consulted for assistance in specific situations. This information is provided as-is, with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein.