This month the U.S. Department of Health and Human Services (HHS) will be notifying you about Employees receiving Advance Premium Tax Credits (APTC) or subsidies from Covered California.
What does this mean for you? It means about one million notices will go out to Employers all over the State from the HHS, letting you know an Employee is getting some government money, and if you don’t answer- you will be charged a penalty by the IRS. The HHS is not discriminating either. They do not care if you’re a small business or not. If a subsidy was paid + the individual listed you as an employer on their application = you will get a notice.
What does the notice look like? Like this.
What can you do? Take a deep breath. Then quickly- file this appeal with the HHS. You must file your appeal within 90 days of receipt. So, the moment you see that form is the moment the clock has started (if not sooner). Were you not subject to the ACA requirement last year? TELL THEM. Was that employee part time or otherwise never eligible for benefits? TELL THEM. Please remember, this appeal is being filed with the HHS, who does NOT ultimately decide if you will be subject to the penalty, however neglecting to file an appeal will hurt you when the IRS reviews your penalty eligibility, which they will also be doing later this year.
What do you say to your Employee? This is where it gets interesting. If you win your appeal because you are an Applicable Large Employer and you offered an eligible program and contribution (aka- you did what you were supposed to do), your employee will likely be forced to repay the IRS for all of the money they already received (ouch!). If you don’t win your appeal, you are likely going to pay a penalty to the IRS (double ouch!). Click here if you’d like to access a great article, which includes a template letter idea to give to your employee(s) and begin a discussion on this topic.
Or you could just hit the Easy button…email me and I’ll help you out.
Have a great day!