The Wagner Law Group
Wagner Law Group, A Professional Corporation, is a nationally
recognized ERISA & employee benefits, estate planning,
employment, labor & human resources practice.
in 1996, The Wagner Law Group has 24 attorneys engaged
exclusively in employee benefits, estate planning and
employment law. Six of our attorneys are AV rated by
Martindale-Hubbell as having very high to preeminent legal abilities
and ethical standards. The firm is among the largest ERISA boutiques
in the country. Our practice is national in scope, with clients in
more than 40 states and several foreign countries.
Wagner Law Group
Fax: (561) 293-3591
7108 Fairway Drive
Palm Beach Gardens, FL 33418
East Kennedy Boulevard
Tampa, FL 33602
Francisco, CA 94104
100 South 4th Street, Suite 550
St. Louis, MO 63102
August 11, 2016
Health and Welfare Law
Responding to ACA
employers have been receiving ACA Marketplace notices saying that one
of their employees has received a premium tax credit to subsidize
their purchase of Marketplace health insurance. This Alert
explains what these notices mean and the action steps available to
employers who receive one.
Background. The ACA's employer mandate provisions,
which became effective in 2015, apply to Applicable Large Employers
("ALEs"). ALEs are employers with 50 or more full-time
employees or full-time equivalent employees ("FTEs").
ACA's employer mandate provisions require ALEs to offer affordable,
"minimum value" health insurance FTEs or pay a penalty for
FTEs who receive a premium tax credit through a Marketplace.
The ACA requires Marketplaces to send notices to ALEs that name the
FTEs who have received premium tax credits and explain that the ALE
may be liable for a penalty.
Notices. The notice
is intended to inform the ALE that it may have potential liability
under the employer mandate because its offer of health insurance
coverage does not appear to satisfy the ACA requirements.
Notices are automatically sent to ALEs having FTEs who receive a
premium tax credit when the FTE has reported that:
- the ALE did
not offer health care coverage;
- the ALE
offered coverage that was not affordable or did not provide
minimum value; or
- the FTE was
in a waiting period and unable to enroll in the ALE's health
Notices provide the FTE's name, birthdate, last
four digits of their Social Security Number and the Marketplace
Application ID Number.
The notice does not mean the IRS has
assessed an employer mandate penalty against the ALE. Rather,
the IRS will independently determine whether the ALE is liable for
the penalty, and the ALE will have the opportunity to dispute any
Responding to Marketplace Notices. ALEs that receive Marketplace notices
should carefully review them to determine how best to respond. In
addition, ALEs should review their internal records to determine
whether the FTE actually did receive an offer of coverage that is
affordable and provides minimum value.
An ALE may appeal a determination that the FTE
was not offered health insurance that meets the ACA
requirements. Specifically, ALEs have 90 days from the date of
the notice to file an appeal by submitting an Employer Appeal Request
Form (available below) to the Marketplace. The form allows an
ALE to refute any incorrect information provided by the FTE, and ALEs
may include documentary evidence with the appeal form to substantiate
that the employee either was offered affordable coverage that
provides minimum value or did not qualify as an FTE.
An ALE that successfully appeals the notice may
avoid having the Marketplace report to the IRS, thereby avoiding the
IRS from assessing the employer mandate penalty. Furthermore,
when a Marketplace reverses its determination, the FTE will be asked
to update his or her Marketplace application and informed of the
possibility of tax liability if the application is not updated.
However, it is important to note that Marketplace
ACA premium credit eligibility determinations and IRS penalty
assessment are separate processes. As a result, successfully
appealing a Marketplace determination may not forestall an adverse
IRS determination. Therefore, employers may want to simply
ignore the Marketplace notice and wait to see if IRS decides to
assess a penalty. Should there be an incorrect IRS assessment,
the employer can make its appeal if and when a penalty is actually
Additional information on the process for
appealing a Marketplace determination is available at:
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appearing herein may be reproduced with appropriate credit.
This Newsletter is provided for information purposes by
The Wagner Law Group to clients and others who may be interested in the
subject matter, and may not be relied upon as specific legal
advice. This material is not to be construed as legal advice or
legal opinions on specific facts. Under the Rules of the Supreme
Judicial Court of Massachusetts, this material may be considered