Affordable Care Act (ACA) Appeals...Are you Ready?

Cindy Fabris

Regional Director NW/Practice Leader, Benefit Administration

Now that the window to submit 1095s for 2015 has closed, applicable large employers or “ALEs” can expect to receive subsidy notifications from the ACA Exchanges.  A subsidy notification will be sent to employers who have employees that (1) purchased coverage on the Exchange and (2) are receiving premium subsidies for the coverage. 

The importance of the notification?  ALEs are required, under ACA, to provide health coverage that meets minimum value and affordability requirements.  Applicable large employers that fail to offer compliant health coverage to full-time employees are subject to shared responsibility penalties under the ACA.  It takes only one employee enrolled in Exchange coverage and receiving premium subsidies to trigger a subsidy notification and potential shared responsibility penalty. 

The purpose of the subsidy notification is to alert employers that they may be subject to shared responsibility penalties under ACA due to their employee(s) receiving coverage subsidies.  Employers have 90 days to respond to the notification and request an appeal of possible penalties.  Employers who do not respond may be subject to a penalty of $270/month (in 2016) for each full-time employee who enrolled in Exchange coverage and received a subsidy.  Note that the appeal will not determine whether an employer has to pay a fine.  Only the Internal Revenue Service (IRS) can determine which employers are subject to ACA penalties.

Employers can file an appeal in one of two ways:

1)      Complete and submit an Employer Appeal Request Form

2)      Submit a letter to the Health Insurance Marketplace   

It’s important to note that subsidies were made available to employees based on how the employee answered questions during the Exchange enrollment process.  The appeal process is the employer’s opportunity to correct erroneous information that may have been provided during the enrollment process.

Be on the lookout!  Subsidy notifications are generic looking and may be difficult to identify.  In addition, the notification will be sent to the employer address the employee included on their Exchange application.  If an employer has multiple locations, it’s important to notify all locations to be on the lookout as well. It’s also unclear as to whom will be sending the notifications, it could be a State Exchange or Federal Exchange based on the employee’s location.

Additional information regarding subsidy notifications can be found at:https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/Employer-Notice-FAQ-9-18-15.pdf

Additional information regarding the employer appeal process is available at:https://www.healthcare.gov/marketplace-appeals/employer-appeals/

 

About The Author:

Cindy Fabris is the Northwest Regional Director as well as the Benefit Administration Practice Leader for Craford.  She joined the Craford team in 2008 with over 20 years of Human Resources experience specializing in health and welfare plans, HRIS, leave of absence management, benefit administration outsourcing and vendor relationships. She manages our Portland, Oregon office overseeing the delivery of services to clients and our Outsourced Benefits Administration practice partnering with our best-in-class technology partners to streamline and automate the cumbersome benefits administration functions. Her diverse background working for both corporate clients and health and welfare consulting practices provides us with the unique ability to anticipate and truly understand the needs of our clients; we know what it’s like to “walk in your shoes”. Thus, we are able to provide practical solutions that truly cater to the needs of our clients.

Cindy received her Bachelors of Science in Business from California State University at Long Beach and her Master’s in Business Administration from George Fox University.