Last month, the US Department of Health and Human Services made two announcements about health subsidies within the state and federal exchanges, which bear an impact on employers in 2016.
And the announcements are? First, when a worker applies for a subsidy, their boss is going to get notified of that by the federal marketplace. Second, some employers are going to receive a phone call from consultants hired by HHS to gather details on the health coverage they offer.
You may guess how these actions intersect. HHS is getting ready to conduct audits, both on workers who receive subsidies and on the employers whose plans they’ve opted out of. Their question is fair: If employers are really offering sufficient health coverage, why are their employees opting for the subsidy?
Let’s look at both actions a bit more closely
1. The federal marketplace will notify their employer of anyone who applied for financial assistance.
If a worker opts out of the health coverage offered through their work, and turns to the federal marketplace instead, their employer needs to know. It may mean that the coverage they’re offering doesn’t meet ACA requirements. Even if they are in compliance, it may mean they’re due for an audit. Either way, employers are entitled to know what’s coming down the pike.
If the federal marketplace determines that an employer isn’t offering minimum essential coverage and minimum value at a price their employees can afford, the employer can appeal that. Ultimately though, it will be up to the IRS to make a decision about their liability and shared responsibility payment.
2. A consultant from HHS will be calling employers to find out about the health coverage they’re offering.
To verify the data that supports this process, the Centers for Medicare & Medicaid Services are asking certain employers to participate in a request for info. They want to evaluate whether groups of one or more workers were speaking accurately when they said their jobs didn’t offer affordable coverage at minimum value.
Of course, both “affordable” and “minimum value” are carefully-defined terms. A plan is considered affordable if the employee’s contribution comes in at less than 9.66 percent of their 2016 annual household income. It’s said to offer minimum value if it’s designed to pay at least 60 percent of all the costs for services in a standard population, and includes substantial inpatient and physician services.
How to prepare for these changes?
If you receive a notice or a phone call having to do with these actions – and even if you don’t – it’s a good idea to review your Summary of Benefits and Coverage Sheet to ensure that you’re meeting ACA standards with the coverage you offer your workers.
According to CMS, if you’re asked to provide information about the coverage you offer, you’ll need only to provide it for the lowest-cost, self-only health plan on your books for 2016. Be aware, you don’t have to participate if a CMS consultant calls you up. It’s your choice whether to answer the questions they ask.
Not sure how to prepare for the possibility of an audit? Talk to us. At BeaconPath we can guide you through the complexities and make sure you’re standing on the best possible footing. Want to stay on top of the latest health care news? Subscribe to our blog below. Want more great ideas on how to save 1o% or more on health care premiums? Download our newest report.