The Department of Health and Human Services issued proposed regulations on the implementation of health insurance exchanges, Medicaid and the Children's Health Insurance Program (CHIP). The lengthy regulations include helpful guidance for employers, with respect to (1) employer verification of an individual's eligibility for employer-sponsored health coverage, and (2) procedures for disputing an individual's eligibility for coverage in an Exchange. These two items will be important for an employer in disputing liability for the employer pay-or-play penalty.
Verification of Eligibility for Employer-Sponsored Coverage
Employees who are eligible for affordable employer-provided health coverage that provides minimum value are not eligible to receive a premium tax credit to purchase health coverage through an Exchange. The proposed regulations offer procedures for determining if an individual is eligible for qualified employer health coverage. These procedures address
- Confirming if an individual has access to coverage; and
- Information about the employee's share of the cost of coverage and the minimum value of coverage.
An individual must provide information to the Exchange about employer coverage before being eligible for advance payment of the premium tax credit. This information includes
- The employer's contract information and employee identification number;
- If the individual is employed full-time; and
- If the employer provides minimum essential coverage and the required contribution for the lowest-cost employer plan.
The Exchange is tasked with verifying the individual's reporting of employer coverage. The proposed regulations state that HHS wants to help consumers be able to provide the information they have to report with respect to employer-sponsored coverage. The government will create a pre-Exchange-enrollment template for gathering information about access to employer coverage that once completed, will help the Exchange determine eligibility for advance payments of the premium tax credit and cost-sharing reductions. An applicant will be able to download the form and give it to the employer to complete.
Employer Appeals
The proposed regulations provide an appeals procedure for employers to use to appeal a determination that the employer does not provide minimum essential coverage or that the employer-provided coverage is not affordable.
The appeals process will give the employer at least 90 days to request an appeal and provide information to support its position. The appeal will go directly to the Exchange, which must follow certain established processes for ruling on the appeal.
Employers that do offer health coverage will want to be sure that their employees do not receive an advance premium credit or cost-sharing reduction to purchase coverage through an exchange. Employers who think they are not subject to the pay-or-play penalty will have a method for disputing an employee's claims that the employer is not offering qualified coverage.
