Public Exchange Notices Coming Soon

Public Exchange Notices Coming Soon

Our Thinking / Healthcare /

Public Exchange Notices Coming Soon
Calendar10 June 2016

Public exchange notices are coming soon to a mailbox near…well, we’re not really sure where they will land, but they are coming soon.

The 38 federally run public health insurance exchanges are preparing to send employer notifications when their employees have enrolled in individual exchange coverage and claimed advance premium tax credits (APTCs) under the Affordable Care Act. To receive APTCs an individual completes an application for health coverage that asks for employment status, employer contact information, and details about employer-provided coverage and how much the employee must pay for the lowest-cost self-only coverage option with minimum value. Where the exchange mails the employer notice depends on the address the applicant puts on the form. If the employee provides an incomplete address, the employer may not receive a notice at all.

The good news is that employers are not required to respond to this notice, but there may be reasons to do so. Appeals may:

  • Help employees avoid an accumulating repayment obligation to the IRS for a wrongfully claimed subsidy
  • Lead to less interaction with the IRS over 1095-C filings and a smoother reporting process overall

It will be important to consider whether the time, effort, and cost to appeal outweigh these benefits. Unless an employee is enrolled in minimum essential coverage (MEC), it may not be worth it to appeal the notice since you won’t know whether the employee would be eligible for a subsidy. (Remember, employees enrolled in MEC are not eligible for APTCs, regardless of the coverage’s minimum value or affordability.)

If you want to help employees without the time and expense of appealing the notices, consider contacting those who appear to have claimed APTCs mistakenly. But do so with caution. Do not discourage anyone from obtaining an APTC or express a negative view about an employee claiming an APTC. And remember employers cannot retaliate against an employee who obtains an APTC.

Whether you plan to appeal the notices or not, you should prepare for their receipt. Expect employees to make errors in filing out the employer address section of the application, and instruct mailroom staff and other possible recipients to be on the lookout for notices and to forward them to the appropriate location. Recipients should consider exchange notices confidential and handle them appropriately. Having recipients forward them to a central location allows you to anticipate the amount of interaction you may have with the IRS over your 1095-C fillings.

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