Handling an ACA Marketplace Notice (Exchange Notice)
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This post is for Applicable Large Employers (ALEs) required to comply with the Affordable Care Act. We hope you find it helpful.
The following is sourced from the article What Does a Marketplace Notice Mean, and How Are They Reconciled?
“Receiving a Marketplace Notice doesn’t mean your organization owes a penalty, although that’s a possibility.
A Marketplace Notice is sent to an employer when an individual enrolls in coverage through an exchange, is deemed eligible for a premium subsidy and provides an employer’s address on the enrollment application.
HR and ACA Marketplace Notices
The Marketplace Notice may end up at an employer’s local office rather than the office where HR is based, since the notice is sent to the address the employee provides.
Therefore, it’s important for HR leaders to ensure that staff members in all locations are aware of the importance of Marketplace Notices and have a plan in place to promptly send all notices to the people designated to handle them.
Marketplace Notices simply alert employers that their employees have received a premium subsidy in an exchange.
ACA Penalties
In some cases, this is not a problem for the employer and will not trigger a pay-or-play penalty.
Employees who work part-time or seasonally may be eligible for subsidies in an exchange if they aren’t eligible for the employer-sponsored plan, and the employer is not on the hook for the play-or-pay penalty.
Employers may also use IRS approved safe harbors which shelter them from a pay-or-play penalty, but leave their employers free to receive a premium subsidy.
In other cases, the Marketplace Notice will alert HR leaders to a potential problem — either that the organization should’ve offered affordable, minimum value coverage and failed to do so, or that the organization did offer affordable, minimum value coverage and the employee mistakenly received a premium subsidy in the exchange.
Marketplace Notice Appeal
Once an ACA Marketplace Notice has been received and sent to the correct person with the organization, the first step is determining whether an appeal is necessary.
If the employee had access to the organization’s health plan and the plan provided affordable, minimum value coverage, an appeal should be filed.
Generally, appeals must be within 90 days. A separate appeal form has to be completed in response to each Marketplace Notice.
Once the exchange receives the appeal, they’ll send letters to the employer and the employee letting them know that the appeal has been filed. If additional information is needed, the exchange will request it.
Appeal Process
The employee will be given a chance to submit additional documentation explaining why the exchange subsidy is justified.
If the exchange determines the employee was not offered affordable, minimum value coverage, the employee will be able to keep the exchange subsidy.
If the employer mandate applies, the employer may be subject to a play-or-pay penalty, assessed at a later date by the IRS.”
Passport Software’s ACA specialists can help answer questions about Marketplace Notices and ACA questions in general. To learn how our ACA Software and Services can help prevent penalties contact us at 800-969-7900.