| Insights

It’s Marketplace Appeal Season!

All of us of a certain age remember the Bugs Bunny cartoon in which Bugs and Daffy confused dimwit Elmer Fudd as to the current hunting season – i.e., wabbit (Bugs) or duck (Daffy) – ending with the proclamation of baseball season. Play ball!  Whatever other season you think it may be now, know this: it’s also Marketplace Appeal Season.

The online employer appeal function of Healthcare.gov still isn’t operational, so Marketplace subsidy certification notices are being mailed to employers from this address:  Health Insurance Marketplace, Department of Health and Human Services, 465 Industrial Boulevard, London, KY 40750-0001.  We saw our first notice last week; it was dated June 21, 2016.  With identities redacted, here is the text.

Dear Benefits Manager:

The person listed below submitted an application for health coverage through the Health Insurance Marketplace in [redacted] and indicated that he or she is an employee of [redacted] at the address shown above.

This person reported that he or she:

  • didn’t have an offer of health care coverage from [redacted];
  • did have an offer of health care coverage, but it wasn’t affordable or didn’t provide minimum value; or
  • was in a waiting period and unable to enroll in health care coverage.

The employee has been determined eligible for advance payments of the premium tax credit (APTC) or cost-sharing reductions (CSRs) for at least one month during 2016 to help pay for Marketplace coverage and has enrolled in coverage through the Marketplace.

Why am I getting this notice?

This notice Informs you that your employee was found eligible for APTC or CSRs and that, if various conditions are met, you may have to pay an employer shared responsibility payment to the Internal Revenue Service (IRS) in the future. It also notifies you of your opportunity to appeal this eligibility determination.

Certain employers (those with at least 50 full-time employees or full-time equivalent employees, called applicable large employers) might have to pay an employer shared responsibility payment for any month that at least one full-time employee enrolled in Marketplace coverage and receives APTC or CSRs.

Important: This is only a notification that [redacted] may have to pay an employer shared responsibility payment. Only the IRS, not the Marketplace, can determine whether this employer will owe an employer shared responsibility payment.

What can I do next?

To learn more, you can visit IRS.gov/aca or contact the IRS at 800-829-4933 Monday- Friday, 7 a.m. – 7 p.m. your local time (Alaska & Hawaii follow Pacific Time).

You may file an appeal to the Marketplace if you believe there’s been a mistake regarding the employee’s eligibility for APTC or CSRs. If you believe your employee was incorrectly determined eligible for APTC or CSRs because you offered the employee affordable, minimum value health coverage, filing an appeal could help reduce the employee’s potential tax liability. Filing an appeal could also eliminate reports from the Marketplace to the IRS that your employee received APTC or CSRs following an appeal decision in your favor. However, filing an appeal won’t necessarily affect whether you have to pay an employer shared responsibility payment to the IRS, because the IRS will determine independently whether you have to pay.

If you appeal, the Marketplace will consider evidence provided by both you and your employee to determine if the employee is eligible for APTC or CSRs.

Remember, it’s a violation of the Fair Labor Standards Act to discriminate against any employee because he or she received APTC or CSRs.

What are my appeal rights?

You have 90 days from the date of this notice to request an appeal from the Marketplace. For more information about the employer appeal process and to download the employer appeal request form, visit HealthCare.gov/marketplace-appeals/employer-appeals and mail the completed form to:

Health Insurance Marketplace

465 Industrial Blvd.

London, KY 40750-0061

You may also fax the form through this secure fax line: 1-877-369-0129.

You must include a copy of this notice with your appeal request.

It’s worth stressing again: If you open these envelopes and see the employee names, you will expose your organization to claims from those employees that their subsidy certifications motivated your subsequent, adverse employment actions against them.  You’ll bear a heavy, expensive burden to disprove such claims.  Better to outsource your appeals under a written agreement that deprives you of knowledge of the names appearing in such notices.  If you have not done that yet, consider doing it soon, because . . . it’s Marketplace Appeal Season.  Play ball!