Risk & Business Magazine JGS Insurance Risk & Business Magazine Winter 2017 | Page 8

THE ACA
The Affordable Care Act
What You Need To Know
T
he Affordable Care Act
(ACA) requires that certain
employers (those with at least
fifty full-time equivalent
employees) provide health
insurance coverage to their employees that
meets “Affordability” and “Minimum Value”
guidelines. If your medical plans did not
meet those requirements and an employee
purchases individual insurance through the
Marketplace (or “Exchange” or “Obamacare”),
the employee may be eligible for a subsidy
for the individual insurance. If the employee
receives a subsidy, this may trigger a penalty
from the IRS:
•
•
If you had fifty or more full-time
equivalent employees last year and the
employee received a subsidy through
the Exchange, you will not be assessed a
penalty if the coverage you offered met
the Affordability and Minimum Value
requirements.
If you had fewer than fifty full-time
equivalent employees last year and the
employee received a subsidy through
the Exchange, there will be no penalty
because the Employer Mandate does not
apply and the coverage you offer does
not need to meet the Affordability and
Minimum Value requirements.
The US Department of Health & Human
Services (HHS) is routinely sending notice
letters to employers that had some employees
purchase coverage through the Exchange and
receive a subsidy. The purpose of the notice
is for the HHS to check the subsidy eligibility
of these individuals and allow employers
to address or avoid any potential penalties.
Employees who received the subsidy (their
names will be listed on the letter) will have
reported that they
•
were not offered health care coverage
through the employer (this is why having
8
signed waivers on file is very important);
• were offered health care coverage but
it was not affordable or did not meet
minimum value; or
• were in a waiting period and unable to
enroll in health care coverage.
If an employee was eligible for the health
care coverage offered through the employer
(based on full-time status or working the
required number of hours per week), the
employee is not eligible for the subsidy and
the employer will need to file an appeal. The
appeal instructions are on the letter, but it
just involves completing the appeal form and
mailing or faxing it to the Health Insurance
Marketplace (fax and mailing information
are in the letter). You have ninety days
from the date of the notice to request an
appeal. The Marketplace will review the
information to determine if the employee is
indeed eligible for a subsidy. You should note
that only the IRS can determine whether a
penalty will apply to the employer. Since the
appeal is filed with HHS, a separate appeal
may be required if the IRS determines the
employer owes a penalty when, in fact, there
is no liability. This will be determined after
reviewing the 1094 and 1095 reports.
If the employee was not eligible for the
health coverage offered through the employer
(because the employee was part-time or
temporary or does not meet the eligibility
requirements), then the employee should
be entitled to the subsidy. You do not need to
file an appeal. The appeal is only to advise
the Marketplace that the individual is not
entitled to the subsidy and the reason(s) why.
This is a good opportunity to remind you
that any eligible employee who waives coverage
needs to complete, sign, and date a waiver form.
This is your proof if the employee ever claims
that he or she was not offered coverage.
The ACA requires employers to provide
BY: BARRY FIELDS,
VICE PRESIDENT OF EMPLOYEE
BENEFITS, JGS INSURANCE
employees with a written notice informing
them about the Marketplaces where they can
obtain individual health coverage. A lot of
employee confusion and follow up by HHS
can be avoided if you meet the requirements
of providing employees with this notice. The
notice is very important because it helps
clarify whether the employee will be eligible
for Marketplace subsidies (eligibility for
subsidies depends on whether the health plan
meets certain standards related to coverage
and affordability). The concern is that
employees are accepting the subsidies from
the Marketplace even though they are not
eligible, because eventually, the employees
will need to refund the money. The annual
notice will serve as an important reminder
about the eligibility for subsidies.
The notice requirements were originally
effective on October 1, 2013, but it is often
overlooked that new employees must be given
the notice within fourteen days of their date of
hire.
Open enrollment in the Marketplace for 2018
runs from November 1, 2017, to December
15, 2017. It is advisable to provide all current
employees with the notice prior to your open
enrollment every year so they are reminded
of the eligibility requirements to receive a
discount on their health insurance. +
Barry Fields has over 26 years of employee
benefits experience advising clients in a
wide range of industries, professional and
industrial, public and private, throughout
the United States and worldwide.
Barry specializes in providing full-service
benefits consulting to clients including
program design, compliance, plan funding,
underwriting, wellness programs, employee
communications, benefits administration,
employee advocacy and the use of effective
strategies in benefits management.