October 02, 2015
The Department of Health and Human Services announced that, starting in 2016, the federal exchanges will begin notifying certain employers by mail if one of their employees has received a premium tax credit which may trigger a penalty. The federal exchanges will not send the notices via email, nor will HHS allow employers to register addresses to which they would like the notices sent, thus enabling employers to receive notices concerning employees in a timely fashion. Under the ACA, exchanges are required to send notices to employers identifying any employee determined to be eligible to receive a premium tax credit. Full-time employees who actually receive a tax credit can trigger an employer penalty, and employers have only 90 days from the date of the notice to appeal any exchange determination and avoid a penalty. However, despite the fact that the notices are only going to "certain employers," the HHS announcement says the IRS will independently determine any employer penalties without regard to whether an exchange notice was sent to an employer or whether the employer had any opportunity to appeal an exchange determination. Although HHS is considering electronic notifications in the future, it is not clear when that will be implemented.