ACA Employer Appeals – Time is Money

You’ve worked hard to provide your employees with ACA-compliant health insurance options. But sometimes your employees simply make another choice and get their health insurance coverage on their own through the Healthcare.gov Marketplace.

Such a situation poses no problem… until the employee receives a premium subsidy for his or her policy purchase.

Companies are starting to receive notifications from the Marketplace when these subsidies are issued, because in order to get that subsidy, recipients have to declare that they were not offered “affordable minimum essential coverage” from their employers. Whether it’s due to a paperwork error, employee error or intentional dishonesty, employers can get hit with thousands of dollars in fines as a result.

To avoid this, it’s important to evaluate whether you will need to file an appeal with the Department of Health and Human Services (HHS) within 90 days of receiving the Marketplace notice. In this appeal, you would need to demonstrate that you have indeed offered ACA-compliant health coverage to the employee.

The initial steps to file an appeal are actually quite simple – fill out the department’s Employer Appeal Request Form, draft a letter with certain information about the business and the filing, and mail these materials (along with a copy of the Marketplace notice) to HHS. (The Marketplace page on this matter provides complete instructions and a link to the form.)

Once your appeal is received, you will receive a letter from HHS describing the process further and telling you how to submit additional materials if they are required. Because the appeals process – and the ACA in general – are relatively new, there is no estimated timeframe on how long you might wait for a final decision.

You should also notify your employee immediately that you are filing an appeal; if your efforts in filing are successful, he or she might have to repay the IRS if the premium tax credit was unwarranted. HHS will also contact the employee, but it’s a good practice to gently advise him or her from an employer standpoint as well. In other words…. in the name of positive employee relations, it’s better that they hear it from you first than from the IRS.

It is also important to provide your employees with a notice of coverage options required by the ACA that can be found at https://www.dol.gov/ebsa/healthreform/regulations/coverageoptionsnotice.html.

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