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The Wagner Law Group

The Wagner Law Group, A Professional Corporation, is a nationally recognized ERISA & employee benefits, estate planning, employment, labor & human resources practice. 

 

Established 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.

 

 

 

 

Contact Info

The Wagner Law Group

 

  Integrity | Excellence

  

Boston 

Tel: (617) 357-5200 

Fax: (617) 357-5250 

99 Summer Street 

13th Floor

Boston, MA 02110


Palm Beach Gardens 

Tel: (561) 293-3590
Fax: (561) 293-3591
7108 Fairway Drive
Suite 125
Palm Beach Gardens, FL 33418

   

Tampa

Tel: (813) 603-2959

Fax: (813) 603-2961

101 East Kennedy Boulevard

Suite 2140
Tampa, FL  33602 

 

San Francisco

Tel: (415) 625-0002

Fax: (415) 358-8300

300 Montgomery Street

Suite 600

San Francisco, CA 94104

 

St. Louis

Tel: (314) 236-0065

Fax: (314) 236-5743
100 South 4th Street, Suite 550
St. Louis, MO  63102 

 

www.wagnerlawgroup.com

 

 

 

 

August 11, 2016

 

 Health and Welfare Law Alert

 

 

 

 Responding to ACA Marketplace Notices

 

 

 

 

 

Many 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"). 

 

 

The 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.

 

 

Marketplace 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 coverage. 

 

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 penalty assessment. 

 

 

 

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 assessed.

 

 

 

Additional information on the process for appealing a Marketplace determination is available at:

 

 

 

 

The Employer Appeal Request Form is available at: https://www.healthcare.gov/downloads/marketplace-employer-appeal-form.pdf

 

 

 

This Newsletter is protected by copyright. Material 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 advertising.