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  • Individual Tax Returns are in (at least 81.7% of them based on the IRS estimate of voluntary compliance)
  • The Insurer and Exchange issued 1095’s are processed and in
  • Just 60 days from now the Large employer 1094’s will be in

Now–guess what happens when those data sets from Health and Human Services, State Based Exchanges and the IRS all hook-up?

They make Paper Babies.

The Employer Notice Program is the name for this Pen-Pal relationship which you’ve now entered.  The 1st letter, which you must accept, is from the Exchange notifying you, the employer, that one or more of their employees received a tax credit (subsidy) in 2015.  This of course is the triggering event that causes an employer to owe a shared responsibility penalty–“pay or play” under ACA slang.

Recent guidance from March 2016 outlines the delay for an electronic appeals process.  Thus, each step of correspondence this year will be by paper and mail.

Paper Notification Out, Paper Appeal In, Notification of receipt of appeal on paper, Notice of Results on Paper….

You get the picture.  This is how Paper Babies are born.

Okay, here’s what you should be expecting in your mail, as well as how you should expect to respond to your government pen-pals.

The Notice

  1. You, the employer, will get a notice that one of your employees as been determined eligible for a Subsidy (advance premium tax credit, APTC and/or a cost-share reduction, CSR).
  2. The notice will not only identify the employee, but also indicate that you the employer may be liable for a payment under the ACA “pay or play” fine.
  3. The notice will inform you of your right to appeal.

Your Appeal

  1. You must file your appeal within 90 days from the time the notice was sent (not received).
  2. The guidance issued on March 22, 2016 has extended the deadline for the Online or Telephone process to be in place—Paper Form via snail mail is your only option this year.
  3. The Federal Exchange in most cases (or state exchange in some unique states like California and Washington) must provide assistance.  Here’s the Federal Help website.
  4. Download your Paper Appeal form:  Download Employer Appeal Here.
  5. The Exchange will mail an acknowledgement of the appeal and an explanation of the appeals process.
    • If there are issues that need to be corrected for the appeal to be valid, written notice with instructions for correcting the appeal will be sent to you, the employer.
  6. The Exchange will also mail the Employee in question a notice of your appeal and an explanation for them as well.
    • After all,  if you are correct in your appeal they will owe pay-back money.
  7. It can take up to 90 more days for a notification of the decision to be mailed back to you.

The Employee

  1. If your appeal is denied,  nothing changes and they maintain their subsidy
  2. If your appeal affects the employee’s eligibility for subsidy money, they will have the have an option to appeal this outcome
  3. Actual plan coverage is not affected, except in the event that an employee or their household cannot maintain their Exchange coverage due to the increased cost without the subsidy money

Will all this really happen?

Yes, this will happen.  These Paper Babies will be born.  The US Postal Stork will deliver this bundle of joy to you.

Will it happen as early as Spring 2016? – not likely.  The last time that HHS referenced that timeline was in September 2015, prior to the extension of employer reporting deadlines.

But with the most recent guidance and published updates from just one week ago on March 22, 2016,  I wouldn’t dismiss a summertime arrival.  After all,  if notices are generated in July,  the final decisions wouldn’t be due for 180 days (90 day employer response time + 90 day HHS response time). This means that January 2017 would be the 1st wave of final determinations for Employer Penalties to hit.  {insert Election Conspiracy here}.

Bret Brummitt

Bret Brummitt

Senior Consultant

About the author: An avid learner and resourceful leader with a passion for problem solving, Bret is a calming force in the chaos and fast paced evolution of health insurance, employee benefits, and the growing burden of regulatory compliance. He helps people develop the confidence to see beyond the problem at hand and start to re-imagine their goals. Whether he’s helping a client or a colleague, Bret believes a successful interaction is one that allows us all to dream a little bigger when we’re done.

About AG Insurance: AG Insurance ( helps employers and their employees with solutions focused on positive organizational impact and improved employee experiences.