Employer Shared Responsibility Penalty

Employer Shared Responsibility Penalty

Over the past week, employers across Wisconsin have begun to receive notifications in the mail from the U.S. Department of Health and Human Services (HHS) that one or more employees submitted an application for health coverage through the Affordable Care Act’s Health Insurance Marketplace. Because Employer Shared Responsibility Penalty, Employers should carefully review each notice. Failure to appropriately appeal inaccurate information may have an adverse impact on the employer’s ability to later challenge an Affordable Care Act (ACA) penalty assessed by the Internal Revenue Service (IRS).

Information summarized in the notice about Employer Shared Responsibility Penalty is necessary for the HHS to determine the employee’s eligibility for Marketplace insurance and potential tax subsidies. The information is also important for the IRS. The IRS will assess the ACA’s “employer shared responsibility” penalty against an applicable large employer if the employer fails to offer health insurance to enough full-time employees and their dependents, or if that health insurance is not affordable or does not provide minimum value.

The HHS notice provides an opportunity for employers to assert the employee: 1) was offered health coverage from the employer; 2) the offered coverage was affordable and provided minimum value; and/or 3) the employee was not within a waiting period and was otherwise able to enroll in coverage. If an employer fails to appeal inaccurate information contained within the HHS notice, the IRS may later argue that failure to respond to the HHS notice was an admission of that information for purposes of the ACA Employer Shared Responsibility Penalty.

Therefore, employers should closely review the HHS notice to ensure the information claimed is accurate and consult with legal counsel to determine if an appeal is appropriate or necessary.

This article should not be construed as legal advice and is intended for general information purposes only. If you have any questions regarding this article, you should consult your legal counsel.