Appealing an employee’s ACA subsidy? Here’s what you need to do
Heads up: HHS is about to start notifying employers about the 2016 subsidies on the federal exchange.
And whether it’s the result of intentional fraud (think part-time worker claiming full-time status) or a simple error, you may find out an employee received a premium tax credit when your firm actually provided ACA-compliant healthcare coverage.
So what should you do if you receive an inaccurate subsidy notice?
Step No. 1
The first step is to appeal to HHS and let the agency know that your company offered ACA-compliant coverage. Once employers receive a notice, they have 90 days to appeal, and the agency posted a specific appeal form on HealthCare.gov, which can be found here.
Of course, because the IRS is the agency that actually imposes the ACA penalties, you’ll also have to let the Service know about the mistake.
IRS has said it will notify employers about potential penalties and give them a chance to respond before actually assessing those penalties.
Step No. 2
Letting an employee know you plan to appeal an ACA subsidy can be a bit more complicated. For one thing, if the subsidy was the result of an honest mistake and your appeal is successful, the employee may have to repay the tax credit he or she received.
When notifying an employee about the appeal, it should be written (for documentation purposes) and reviewed first by an attorney.
It should cover the reasons for the appeal (We believe the health insurance we offered you for 2016 meets the ACA …) as well as what can happen as a result (contact from feds, repayment, etc.).
The notice should also steer employees to relevant ACA resources and offer to answer any questions about your benefits.
Lois Gleason, CEBS, offers an excellent template of such a notification here:
Free Training & Resources
White Papers
Provided by UJET
Further Reading
Reassessing HSA employer contributions can increase participation while capturing meaningful payroll tax savings. Employer contributions to...
Did you hear about the Snowflake hack? Snowflake is a cloud computing company that got blasted by a series of attacks earlier this spring. ...
While the IRS can assess penalties under the Affordable Care Act (ACA), it can’t issue the certifications required beforehand, a court ha...
Check fraud is on the rise again. The U.S. Postal Service just alerted financial institutions that check fraud DOUBLED from 2021 to 2022. ...
A beneficial ownership reporting rule that takes effect January 1, 2024 may add another critical item to your compliance to-do list. An ...
EBSA FY 2025 Enforcement Snapshot $1.4B recovered for workers and plans 878 civil investigations closed 253 criminal investigatio...