Health InsuranceMarketplace

Exchange Notices

Lisa Klinger, J.D. , The Leavitt Group

September 8, 2016

Agenda

Two different types of government notices

Employer Shared Responsibility & “ALEs”

Marketplace Subsidy Notices

Employer Appeals

Bases for Appeals

What you need to remember

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Two Possible Gov’t Notices Marketplace Subsidy Notices

• Notifies all-size employers if one of their employees qualified for asubsidy and bought health insurance in the Marketplace in the currentyear

IRS Penalty Notices• Assesses ESR penalty on ALE who did not offer affordable,

minimum value coverage in prior year to at least 95% of full-timeemployees, or to a particular employee who bought coverage inthe Marketplace and qualified for a subsidy

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“ALEs” and “Employer Mandate”

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ALEs must offer MEC to full-timeemployees that is both affordableand provides at least minimum value,

OR

Pay a penalty called EmployerShared Responsibility, if anyFull-time employee gets aSubsidy to buy insuranceIn the Marketplace

Penalties and Subsidies If employee enrolls in employer “minimum essential

coverage” that is less than minimum value or more thanaffordable:

• employee should not qualify for a subsidy?

• should not result in penalty for employer?

Two different types of penalties:

• IRC 49980H(a) – offer coverage to less than 95% of FT EEs

• IRC 4980H(b) – particular FT EE is not offered affordable, MVcoverage and gets a subsidy to buy insurance in theMarketplace

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Marketplace Subsidy Notice

WHO sends it: Federal Marketplace & 8 StateMarketplaces (CA, CO, DC, KY, MD, MA, NY & VT)

WHY? To notify any-size employer that one of theiremployees (FT or PT) qualified for a subsidy andbought coverage in the Marketplace.

WHEN: Notice is regarding coverage & subsidy inCURRENT year. Notices are being sent now.

WHAT: Notice to employer, Employer Appeal Form,Employer Coverage Tool

ACA section 1411: Exchange verification process

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HHS Subsidy Notice to Employer

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Covered California Subsidy Notice

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More on Marketplace Notices For 2016, Marketplace will send notices to the employer’s

mailing address that the employees provided on theirapplications for Marketplace coverage.

Hot tip #1: For new or terminated employees, provide Noticeof Marketplace Coverage and be sure to include the address youwant employees to use if they apply for Marketplace coverage.

Hot tip #2: Notify your mailroom so they will be on the look-out and will forward Notices to Corporate HR or Benefits Dept.

• Especially employers with numerous locations (e.g., restaurants,retail stores, hotels) and large single-site employers with full-time,part-time and variable hour employees (e.g., hospitals,manufacturing plants).

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Employer Appeal of Notice

Employer CAN appeal – but is not required to

Appeal must be within 90 days of receipt of notice

Appeal is NOT on whether employer owes a penalty –IRS decides that.

Appeal is to say employee is not eligible for asubsidy because employer offered MEC that isaffordable and provides at least minimum value

Should employer also appeal if employee enrolled incoverage that is NOT affordable or NOT minimumvalue?

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Should You Appeal if. . . ?Situation Appeal or Not?Employee works part-time so was not eligible foremployer group health plan

No

Employee was in waiting period or in measurementperiod to determine if full-time

No

Employee is enrolled in employer coverage that isnot affordable or does not provide minimum value

No ???

Employee did not work for you during the monthsto which the Notice applies

No

You are a small employer & you offered thisemployee coverage that was affordable andprovided minimum value

You can,But no penalty on you

You are an ALE & you offered this employeecoverage that was affordable and providedminimum value

Yes

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Screenshot of Employer Appeal Form

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Employer Appeal Form Section 2: allows employer to designate a secondary

contact to help with the appeal. Section 3: Why should the employee not have been

eligible for the subsidy? Information could include:• Documentation showing employee share of lowest-cost self-

only coverage offered by the employer was less than $93 in2015, or was less than 9.56% of the employee’s compensationunder either the “W-2” or the “rate of pay” safe harbor.

• Documentation showing coverage offered to the employeeprovided at least “minimum value” – this might be theinsurance company SBC stating that the policy provided atleast minimum value.

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Screenshot of Employer Appeal Form

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Employer Appeal of Notice

Use Employer Appeal Request Form or write a letter

Can appeal online or by fax, or on paper throughDecember 31, 2016.

Include only “minimum necessary” information inappeal.

Address for appeals:• Health Insurance Marketplace, HHS, 465 Industrial Boulevard,

London KY 40750-0061• Fax: 1-877-369-0129 Marketplace will respond within 90 days of Appeal.

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Resources Employer Appeal Request Form & Instructions

• https://www.healthcare.gov/downloads/marketplace-appeal-request-form-a.pdf

Employer Coverage Tool

• https://www.healthcare.gov/downloads/employer-coverage-tool.pdf

HealthReformUpdates.com – articles

• https://news.leavitt.com/health-care-reform/aca-marketplace-irs-notices-whats-difference/

• https://news.leavitt.com/health-care-reform/large-employers-notice-of-employees-subsidy-eligibility-march/

• https://news.leavitt.com/health-care-reform/tax-credit-notices-from-exchanges-to-employers/

Marketplace Appeals Center at 1-855-231-1751

• Monday through Friday, 7:30 a.m. to 8:30 p.m. Eastern Time (ET); andSaturday, 10 a.m. to 5:30 p.m. ET.

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Instructions – ER Appeal Form

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Employer Coverage Tool

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Employer Coverage Tool - 2

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What You Need to Remember Exchange Notice is on employee eligibility for subsidy, not on

whether employer owes a penalty

You are not required to appeal, even if you can

If you appeal, do so within 90 days.

Your employee will be notified if you appeal, so you might wantto have a letter you send to employees

Your appeal for 2016 will not affect whether you receive an IRSpenalty notice for 2015, but may affect 2016 IRS notices

It is illegal to discriminate against an employee because s/hereceived subsidized coverage in the Marketplace

Your Leavitt advisor can assist you if you appeal

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THANK YOU!

QUESTIONS?

DISCLAIMER:• This presentation is intended for general

informational purposes only and does notconstitute legal advice.

• Consult with your legal counsel to discuss howlaws discussed in this presentation apply to yourspecific circumstances and affect yourobligations.

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