It appears as if the Department of Health and Human Services has recently been on a notice mailing binge. Many companies have received a version of the notice pictured below in the last few weeks. The Centers for Medicare & Medicaid Services (CMS) has issued a helpful FAQ document about the notices that you can access here.
Here are some summary items to take note of:
• This is not an announcement of penalty, only a notice that one of your employees applied for and was found eligible for a subsidy in the exchange.
• There is no action that needs to be taken at this time as the IRS, not the HHS/Marketplace, issues the penalties.
• If the system works correctly, then cross referencing this with the 1095-C reports they received should result in no further action if an appropriate offer was made and declined or if the employee is ineligible for coverage based on employment status.
We would advise a client to appeal this particular notice as if they did actually offer the employee coverage and they still applied for the subsidy. In that case, the employee should have never received the subsidy and that is something you can appeal with the HHS/Marketplace and avoid this issue going to the IRS. There is information on how to appeal at the end of the form and businesses have 90 days from reception of the notice to appeal. There is also information regarding how to appeal in the FAQ from CMS.
Contact your Scott Benefits Consultant with any questions.