Shared Responsibility Letter ACA Confusion

Q: I got a letter saying my employee may be eligible for an ACA government subsidy for health insurance and that I may owe an employer shared responsibility payment.  What does that mean, and what should I do with this letter?

A: If the Department of Health and Human Services sent you a letter about an employee that has applied for health insurance through the Marketplace, it means that the employee stated that he or she:

  1. Does not have health insurance available through your company, OR
  2. The health insurance coverage you have provided is not considered “affordable,” OR
  3. That the health insurance coverage you have provided does not provide “minimum value.”

(See What’s Required in an ACA-Compliant Health Plan for an explanation of affordability and minimum value.)

Your required actions depend on your company’s size.

  • If you are a small employer: Disregard this letter, as you are not an applicable large employer (ALE) with 50+ full-time equivalent employees that is required to provide qualifying health insurance coverage to your employees.
  • If you are an ALE: You need to ensure the employee has insurance available and that it is affordable, meaning individual coverage does not exceed 9.5% of the employee’s income, and that it meets the “minimum value” requirements. If all of these conditions are not met, you will likely face a penalty. If these conditions ARE met, you need to appeal the letter.
  • How to appeal: Download this appeal request form and complete the information. You have 90 days to fax both the notice and the appeal request form to 1.877.369.0129 or mail them to:
    Health Insurance Marketplace
    465 Industrial Blvd.
    London, KY 40750-0061
    For more information about appealing, please visit https://www.healthcare.gov/marketplace-appeals/.

If you are found to have an employer shared responsibility in this scenario, you will likely face a fine to help pay for the employee’s insurance coverage.

If you are a Stratus.hr client that meets the conditions to either “pay or play” in regards to the ACA, you should have been notified already about these letters. If you have not been contacted, you do not need to worry about the “pay or play” obligation, as your company size does not meet the ACA compliance criteria.

For more information, please contact us at ACA@stratus.hr.

Brad Fagergren, SPHR, SHRM-SCP

Author Brad Fagergren, SPHR, SHRM-SCP

Brad has been a certified Senior Human Resources Professional (SPHR) since 2010. He services both local and multi-state client companies and is our in-house FMLA expert. Outside of work, you might spot Brad mentoring, chaperoning, watching, or participating in sports.

More posts by Brad Fagergren, SPHR, SHRM-SCP