Employee Benefits Compliance, Exchanges, Exchanges / Marketplaces / Subsidies, Health Insurance Marketplaces, Marketplaces, Notices & Disclosures (Sample forms), Subsidies

Large Employers: No Notice until 2016 of Employees’ Subsidy Eligibility in Marketplace

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The Affordable Care Act (ACA) and implementing regulations establish a notice requirement commonly referred to as the “employer notice program.” Each Health Insurance Marketplace is required to notify any employer whose employee enrolled in Marketplace coverage and was determined eligible for advance premium tax credits (APTC) and cost sharing reductions (CSRs) because the employee attested that he or she was neither enrolled in employer sponsored coverage nor eligible for employer coverage that is “affordable” and meets the “minimum value” standard.

No Notices in 2014 or 2015

So far, no such Notices have been issued by the Federally-Facilitated Marketplaces (FFM) or by most State-Based Marketplaces (SBMs), and don’t expect to receive any notices in 2015.

In 2016 “Certain” Employers will Receive Notices

On September 18, 2015, CMS issued FAQs regarding the employer notice program and announced that the FFM will start notifying “certain” employers in 2016. Specifically, the FFM will notify employers

  • whose employees enroll in Marketplace coverage and receive an APTC for at least one month in 2016,
  • if the employees provided the Marketplace with a complete employer address.

CMS will evaluate the program phase-in for 2016, and determine the best means of expanding and improving that process in subsequent years.

The September 18th notice also gives SBMs the same flexibility to phase in their employer notices process and confirms that SBMs may continue – at their option – to refer employer appeals to the HHS appeals entity. (The FAQs are quite readable and only a bit more than 2 pages long.)

Lack of Notice in 2015 does NOT Change Employer Liability under Employer Mandate

If a full-time employee of an applicable large employer (ALE) receives a premium tax credit for coverage received through a Marketplace in 2015, the ALE will be liable for the employer shared responsibility payment for 2015.

The IRS will independently determine any liability for the employer shared responsibility payment regardless of whether the Marketplace issued a notice or the employer attempted to or did appeal an employee’s eligibility for the APTC.

When Will 2016 Notices be Sent?

The FFM will send the first batch of notices in spring of 2016, after the 2016 Open Enrollment period ends on January 31, 2016. Additional batches of notices will be sent throughout 2016.

For 2016, the FFM will send notices to the mailing address of the employer provided by employees on their applications for Marketplace coverage.  Thus, when employers provide new (or terminated) employees with the Notice of Marketplace Coverage, they should make sure to include the address they want employees to use if they apply for Marketplace coverage.  There is no way to ensure employees will use this address, but at least employers may be able to increase the likelihood they will receive the notices from the Marketplaces.   In future years, CMS will consider alternative ways of contacting employers. 

What Information will be in the Notice?

The notice will identify the specific employee and include a statement that the employee is enrolled in Marketplace coverage with APTC. The notices will not contain the employee’s personal health information or federal tax information.

How Can an Employer Appeal if it did Offer Affordable Minimum Value Coverage?

An employer has 90 days from the date of the notice it receives from the FFM to request an appeal. An employer appeal request form will be available on https://www.healthcare.gov/marketplace-appeals/  .

An employer must mail an appeal request to:

Health Insurance Marketplace

465 Industrial Blvd.

London, KY 40750-0061

Or fax an appeal request to a secure fax line: 1-877-369-0129.