United States

Employer action advised on new health insurance notices


The Affordable Care Act (ACA) requires employers with at least 50 full-time or full-time equivalent employees to offer ACA-compliant health coverage. If your business is subject to this requirement, it can be penalized by the IRS if you fail to offer ACA-compliant health coverage and your employees obtain coverage with tax subsidies through the Health Insurance Marketplace (also known as the exchange).

When employees enroll in marketplace coverage, they are asked whether they are offered ACA-compliant health coverage by their employers. The employee’s response to this query could trigger a penalty on the employer. So, how will an employer know whether an employee is receiving marketplace coverage?

Starting in 2016, the marketplace will mail you a notice indicating that a given employee is receiving tax subsidies for health insurance and that you may be subject to a penalty. The notice will contain details about how you can appeal the determination.

If you receive such a notice, you have 90 days to respond and can include evidence in the appeal that your business did offer the employee ACA-compliant coverage. An appeal judge may request a hearing or additional documentation prior to making a decision on the appeal.

Since the penalty exposure could be over $2,000 for each full-time employee, you should promptly review and respond to marketplace notices.

For further details about this ACA penalty on employers, see this article.

Jill Harris


Jill helps businesses with planning and compliance for employee welfare and retirement plans. She can be reached at jill.harris@rsmus.com.

Areas of focus: Washington National TaxAffordable Care Act