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ACA FAQ of the Month: Should I Appeal a Health Insurance Marketplace Notice?

You may have already received a notice from the Department of Health and Human Services ("HHS"), notifying you that one or more of your employees enrolled in health coverage through the state health exchange. Significantly, although employers can appeal the notice, the notice is not a penalty - penalties will be assessed by the Internal Revenue Service in 2017. That being said, the notice could potentially lead to penalties, and should be appealed ... sometimes. So, how do you know whether you should to appeal a notice?

First, note that the HHS is trying to determine whether the individual who applied for coverage through the state health exchange is eligible for a subsidy. Put another way, the HHS does not care whether you are a small employer and thus not obligated to offer the employee coverage, or whether the employee worked part-time and thus was not eligible to participate in your group health plan. Rather, the HHS wants to know:

  1. Did you offer the employee the opportunity to enroll in an employer-sponsored group health plan?
  2. If so, was the cost to the employee "affordable" and did the group health plan provide "minimum value"?

If the answer to both questions is "yes," then you should certainly appeal. If not, then you may still appeal - but remember that the HHS is not trying to determine your obligations under the ACA, and may deny your appeal even if you did not violate the ACA.

Questions? Suggestion for a future ACA FAQ of the Month? Please contact WS Attorney Peter E. Hansen at (630) 377-1554, or email pehansen@wesselssherman.com.

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