Employee Benefits Compliance, Employer Mandate, Exchanges / Marketplaces / Subsidies, Large Employers, Notices & Disclosures (Sample forms)

Marketplace Notice that Your Employee Qualified for a Subsidy: What’s an Employer to Do?

subsidy qualification

What should an Employer do if it receives Notice from the Health Insurance Marketplace that an Employee qualifies for a Subsidy?

Here’s a quick summary of some important points, and a list of when an employer can and cannot file a response with the Marketplace.

The Marketplace Notice is NOT a Penalty Determination

  • The Notice from the Marketplace informs the employer that the Marketplace has determined that the individual IS eligible for a premium subsidy, AND the individual listed this company or entity as his or her employer.  (It’s called a “1411” notice because that’s the section of the law.)
  • The Notice is sent whether the employer is large or small, and whether the employee is full-time or part-time.

Employers often want to respond to the Marketplace notice if the employee no longer works for the employer, or works part-time and is not eligible for benefits, but in those cases the employer is basically agreeing with the Marketplace’s determination that the employee is eligible for a subsidy, so there is no reason to file the Appeal.  (In fact, the appeal form does not allow an employer to file for these reasons.)  The Notice from the Marketplace is NOT THE SAME as the 226J letter from the IRS.  The IRS letter is a proposed penalty assessment.  The Marketplace Notice is not a determination that the employer might owe a penalty, it is just part of the Marketplace process to determine whether the individual is eligible for a subsidy.

Appealing the Marketplace Decision

  • An employer CAN appeal the Marketplace decision if the employee was offered affordable, minimum value (MV) coverage or is enrolled in the group coverage.
  • The bottom of the Notice lists the healthcare.gov website where the employer can get the Appeal Form if it wants to appeal the Marketplace’s decision.
  • That webpage includes links to the Employer Appeal Request Form, both electronic and PDF versions.
  • If you want to appeal the Marketplace’s decision, you must submit your appeal request form within 90 days of the date of your Marketplace notice.

What Employers CANNOT Appeal the Marketplace Decision?

An employer cannot file an appeal if the employee no longer works for the employer, or if the employee works part-time so is not eligible for benefits from the employer.  IF the employer files an appeal, it must check one of the following three reasons for the appeal (these are listed on page 3 the Employer Appeal Request Form, Section 4):

  • Employee is enrolled in the employer’s group health plan
  • Employee was offered employer’s group health plan coverage that is Affordable and provides MV
  • Employee is eligible for the above, at the end of a waiting period.  (show when waiting period ends)

An employer is NOT required to respond to the Marketplace Notice. But if you are an ALE and the employee was offered coverage that was affordable and provided minimum value, you will probably want to respond within the 90-day response period.