These past few weeks, we’ve been getting phone calls from clients who are receiving Marketplace letters. These are letters from the government that notify employers that they have not complied with the Employer Mandate. Typical violations are that the health insurance coverage offered to an employee was unaffordable, fell short of minimum standards, or the employer did not offer health insurance coverage to an employee who qualifies for it.
The Marketplace letter warns the employer that they may be assessed a financial penalty and this makes sense if an employer has run afoul of the rules. However, our specialists at Creative Benefits find that frequently, many Marketplace letters are incorrect. Often, once we have reviewed a case, we find proof a company has complied fully with the Employer Mandate. The company has offered affordable coverage meeting minimum standards or has not offered coverage — correctly —because an employee was a part-time worker and therefore, not eligible for coverage.
It is very frustrating for employers to be told they are wrong when they have actually done everything correctly. Some employers feel that, since they did everything right, they don’t need to respond to the Marketplace letter. We understand. No one likes doing tasks that seem superfluous. But the law is very clear. Anyone who receives a Marketplace notice must respond, whether or not the notice is correct is irrelevant.
What employers should do in these cases is file an appeal. The appeal needs to show that the employer offered coverage to an eligible employee and it was affordable coverage and adequate coverage, or show that they did not offer coverage to the employee because the employee was ineligible. The only way to avoid a penalty is to prove that the employer acted correctly. Here are a few tips to ease the process.
1. Get an appeal form.
Appeal forms are available online at https://www.healthcare.gov/marketplace-appeals/appeal-forms/
2. Fill out the form, providing as much detail as possible.
Section 3 of the form asks for a description of the health insurance offer, and what reasoning was used to support or justify the offer. Do not just enter a written description of your defense. Support it with data. This means attaching payroll records or attaching Form 1095. Remember, the more data you send in the appeal, the less of a chance there is that someone will come back later asking more questions. Doing this up front may save future headaches.
3. Hold on to absolutely everything submitted in the appeal.
The Marketplace and the IRS are separate and it’s not totally clear yet how solid the links are between the two departments. For this reason, we recommend holding on to absolutely everything submitted in the appeal. It may be necessary to repeat this submission to the IRS at a later date. If that happens, the process will be much easier if you have the material on hand.
We know it seems unfair to have to take this additional step, especially when an employer is in the right, but at this moment, this is the official directive and this is how Creative Benefits recommends handling the situation.
For more help with Marketplace forms, contact Creative Benefits at (866) 306-0200. We can talk you through the process of filling out the Marketplace Appeal forms, or help with any other aspect of your ACA compliance or benefits administration issues.
About the author: Macee Keelan is Vice President of Creative Benefits, Inc. She has been with the company for more than 13 years and specializes in employee benefits.