Federally-Facilitated Exchanges to Notify Employers of Employees with Premium Tax Credits in 2016
Beginning in 2016, the Federally Facilitated Marketplace (FFM) will begin sending notices to employers of individuals who enrolled in marketplace coverage and qualified for a premium tax credit.
When will the notices be sent?
The notices will be sent in the spring of 2016, after the close of the marketplace open enrollment period for the 2016 coverage year. The IRS will be making determinations of liability for the employer shared responsibility payment for the 2015 year, regardless of whether the employer received the notice.
What is the purpose of the notice?
The FFM notice will allow an employer to prepare for any penalties that may be assessed as a result of an employee using a tax credit for marketplace coverage, and to give employers an opportunity to appeal the employee's eligibility for the tax credit. Receiving a notice doesn't automatically mean an employer will pay a penalty, since the marketplace doesn't verify in real time the accuracy of an employee's attestation that he or she was not offered coverage that was affordable and met minimum value. If an employer receives this notice, and they do not agree that the employee should have qualified for the tax credit, the employer may appeal the notice within ninety (90) days of receipt.
As a reminder, an employer that is subject to the employer mandate may be subject to penalties if they did not offer coverage to their full-time employees and employees' dependent children (or the employer offered coverage that was not affordable and/or didn't meet minimum value) and an employee goes to the marketplace and qualifies for a tax credit and uses it to enroll in coverage.
Will employers receive notices for all exchange coverage their employees may enroll in?
No, the FFM notice applies to employees who apply for coverage and qualify for tax credits through healthcare.gov only. States may have their own processes for alerting employers of employees who receive tax credits through a state run exchange.
It is important to note that employers will only receive the FFM notice if their employee has provided the employer's address when they enrolled in coverage.
How does an employer appeal the notice?
The employer appeal request forms can be found on this website. The appeal form is sent to Health Insurance Marketplace, 465 Industrial Boulevard, London, KY 40750-0061 or faxed to 877-369-0129
If you have any questions, please contact your client solutions team.
Compliance Quarterly is being provided as an informational tool. It is recommended that plans consult with their own experts or counsel to review all applicable federal and state legal requirements that may apply to their group health plan. By providing this publication and any attachments, Meritain Health is not exercising discretionary authority over the plan and is not assuming a plan fiduciary role, nor is Meritain Health providing legal advice.