ACA Compliance Update-CMS Releases Subsidy Appeal Form and Instructions
Previously, there was a general expectation that the Centers for Medicare and Medicaid Services (CMS) would issue ACA notices to employers to address the backlog of advance premium tax credits, or subsidies, awarded to employees dating back to the beginning of 2015. Employers would then have an opportunity to appeal the awarded subsides, potentially averting Employer Shared Responsibility penalties and the need to contest such fines with the IRS for failing to comply with Affordable Care Act (ACA) requirements.
However, CMS issued guidance in September regarding the Employer Notice Program indicating that 2015 would be used simply for educating the public about the employer notification and appeals requirements as well as conducting outreach to ensure effective implementation of the program. According to CMS, the Federally-Facilitated Marketplace (FFM) will begin sending batches of notifications in spring of 2016 to certain employers whose employees received subsidies. Because more than half of states operate under the FFM, this will impact a significant number of employers who must prepare to handle the flood of subsidy notifications.
CMS has also provided details about the subsidy appeal process for employers. A few days ago, the highly-anticipated Employer Appeal Request Form was released. Employers may use the form to appeal Marketplace determinations for employees who were deemed eligible for subsidies in part because the employer did not offer health coverage that:
- Met minimum value requirements, and
- Was affordable with respect to the employee
Employers should use the form if they are appealing a notice from:
- The federally-facilitated Health Insurance Marketplace, or
- A state-based Marketplace operating in California, Colorado, District of Columbia, Maryland, Massachusetts, New York, or Vermont
Important note: The appeal will not determine whether an employer has to pay a fine. Only the Internal Revenue Service (IRS) can determine which employers are subject to a penalty.
Employers may file an appeal within 90 days from the date stated on the notice by filling out the Employer Appeal Request Form or by submitting a letter including the business name, Employer ID Number (EIN), employer’s contact information, the reason for the appeal, and information from the Marketplace notice received. The form or letter should be mailed with a copy of the Marketplace notice to:
Health Insurance Marketplace
Department of Health and Human Service
465 Industrial Blvd.
London, KY 40750-0061
A letter acknowledging receipt of the appeal that provides a description of the appeals process and instructions for submitting additional information will be mailed to the address provided by the employee on the appeal form. Employees will also receive a letter stating that the employer has appealed their subsidy, what the process looks like, and how the appeal may affect their ability to obtain a subsidy.
For more details about the Employer Notice Program or the Employer Appeal Request Form, or to learn more about ACA compliance, visit www.healthcare.gov. For more information about the Employer Shared Responsibility Payment, visit www.irs.gov.
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