Have you received a notice from the Marketplace (Healthcare.gov) in the past few weeks? If so, you’re probably wondering what it means–and what you’re supposed to do about it. Here’s a very quick overview.
The Affordable Care Act requires the Marketplace to send a notice to employers who have one or more employees receiving an Advance Premium Tax Credit (APTC) in the individual market. For large employers, a full-time employee receiving a government subsidy could trigger an employer mandate penalty.
Companies with fewer than 50 employees, of course, do not have to worry about the employer mandate, but they could still receive a notice. If you’re a small employer (not subject to the employer mandate) and you receive a notice, here’s what you should do.
First, take a look at the notice and see which employee or employees are receiving a subsidy. Remember, only employees who 1) were not offered group health coverage or 2) were offered coverage that is either unaffordable or fails to provide minimum value can receive a premium tax credit. However, if an employee actually signs up for group coverage, even if it’s unaffordable or fails to provide minimum value, that employee is disqualified from receiving a tax credit.
In other words, if you offer affordable group health coverage in the small group market, or if an employee actually signs up for your plan regardless of how much he or she has to pay, the employee cannot receive a premium tax credit.
If you receive a notice from the Marketplace and believe that one or more of your employees is receiving a subsidy that they’re not qualified for, you can file an appeal with the Marketplace within 90 days of receiving the notice. Here’s the appeal form.
One last thing: the employer notice is still a work in progress for Healthcare.gov. If an employee purchases a subsidized plan but does not provide the employer contact info, the company likely won’t receive a notice. This is true even for applicable large employers that might owe a penalty; the IRS is in charge of the employer mandate and will bill employers as necessary. The government will continue to work out the bugs in the program moving forward.