Health Care Reform Management: Solving the Complex Process of Exchange Notices

If you're an employer with more than 50 employees, and just one of those employees decides to seek health coverage from an Insurance Exchange (also called an Insurance Marketplace) and the employee receives a subsidy to help pay for coverage, you'll likely face a complex web of paperwork, regulations, and processes related to Exchange Notices. How you respond to Exchange Notices makes all the difference between remaining compliant with Affordable Care Act (ACA) regulations, and facing significant penalties

What triggers an Exchange Notice?

You may be doing all the right things by extending an ACA-compliant employer-sponsored benefits plan to your employees, but that doesn’t stop your employee from shopping for a different plan through an Exchange, particularly if their income level qualifies them for a subsidy. If any of your employees apply for coverage through the Exchange, and are deemed eligible for a premium tax credit you'll receive an Exchange Notice. When this happens, you need to decide if you’ll appeal with the Department of Health and Human Services, or just wait for an IRS penalty notice.

Appealing an Exchange Notice triggers a mountain of research and paperwork.

If you appeal, you’ll need to prove you met the requirements of the ACA. Proving you’re in compliance requires three pieces of information:

  • Proof the employee was offered coverage
  • Proof coverage was affordable and provided minimum value
  • Proof of your employee’s salary

As a result, you'll need to manually find and combine information from multiple systems, which can be challenging–unless you have the right systems and expertise in an intuitive, easy to use solution like ADP Health Compliance.

The Exchange Notice reconciliation process.

Once you’ve gathered the right information, a reconciliation process filled with paperwork begins – and time is ticking. You have a relatively short time frame to share paperwork with the government, and review and revise as necessary. If your appeal succeeds, you should avoid fines from the IRS. However, the government may try to reclaim subsidy money form the employee.

The Exchange Notice reconciliation process

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As you can see, it’s a complex process. That’s one of the reasons more and more organizations are turning to ADP Health Compliance to help them prepare for managing Exchange Notices, as well as other aspects of ACA compliance, including:

  • Eligibility
  • Affordability
  • Notice of Coverage
  • ACA Annual Health Care Reporting
  • Penalty Management and Reconciliation

Learn more about ADP Health Compliance >