ACA Marketplace Notices May be Coming Your Way – Do You Know What To Do?

If you’re an employer with 50 or more full-time employees (or full-time equivalents) in the previous year, you must provide affordable, minimum value coverage under the Affordable Care Act (ACA), or incur an IRS penalty.

New this year, businesses may receive an ACA marketplace notice if they didn’t make a qualifying offer — and, in turn, an employee bought a policy from a health insurance marketplace (or public exchange) and was eligible for a federal subsidy.

Not sure what these notices mean? Or feel you received an employer notice in error? You must respond quickly to prevent a possible employer shared responsibility penalty by the IRS.

Here’s What You Need to Understand — and Do:

1. Be aware that a marketplace will typically mail a notice to the address provided by the employee, which is often a local address.
   If you have multiple locations (such as retail stores, restaurants or sales offices) receiving notices, rather than a centralized HR contact, this can cause some confusion. Let managers know they should be on the lookout for these notices, and the person to forward them to.
2. Check if the ACA notice incorrectly states that an employee wasn’t offered qualifying coverage by your business.
   This oversight can happen for a few reasons: the employee who turned down your employer-sponsored coverage is acting dishonestly, the employee misunderstood your offer of coverage or the employee accidentally submitted inaccurate information.
3. Review your internal files to verify if you did, indeed, offer affordable, minimum value coverage under your employer health plan.
   If so, you can file an appeal within 90 days of the date of the notice, along with support documentation. At this time, all appeal requests must be mailed or faxed.
4. Expect a letter from the marketplace acknowledging that your appeal was received, along with an explanation of next steps.
   You may need to submit additional evidence or, if the appeal is successful, the employee will be notified to update their subsidy application or face an individual tax penalty.
5. Recognize that an appeal doesn’t determine whether you’ll incur an employer penalty; only the IRS can do that.
   It is, however, your first line of defense. The appeal process lets you challenge a notice and indicate if an employee wasn’t eligible for coverage due to employment status, or because they declined your offer.
6. Make sure your open enrollment materials clearly state your health coverage meets the ACA affordability and minimum value requirements.
   This can help prevent employee misunderstandings and, in turn, unwarranted notices in the future. Also, always keep accurate benefits records proving that each full-time employee was offered qualifying coverage.
7. Streamline the process further by designating a single person in your business to review and respond to these notices.
   Again, let all your locations know they should forward any future notices to this person.
8. Go to How to Appeal a Marketplace Decision at Healthcare.gov for more information.