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Talk to me more about the employer penalty coming up


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I am going back into the benefit profession and a little rusty around the corners. I wondered if someone could be so kind of explain how a large employer that offers self insurance medical health plans will know if an employee gets a goverment subsidy on the exchange? Is that something that is asked on an open enrollment form? Does the employee have a field that states I am opting out of company plan to be on a private exchange with the gov. subsidy? Or does an employer run salaries and try to guess which employees might take it? Little confused on the process. And once it is determined someone received the subsidy, when and where is the penalty paid? Does this also apply to the few plans out there that are grandfathered? Anything else I might have missed in the last few years for large employers :)

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You have a lot of good questions that are not amenable to responding here. You should engage counsel or other adviser to give provide you with answers. Alternatively, there are a lot a good resources (white papers, client alerts, and the such) on the internet that you can look at.

And, yes, I believe that there are some things that you might have missed "in the last few years"!

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Whether the employer offers a self-funded or insured plan, the notification is the same, the employer will receive a bill for the penalty amount owed. Keep in mind though, the penalty is only applicable if the employer plan failed the benefits and/or affordability test. When applying for the subisidy at the exchange, the exchange will verify if the individual is eligible for the subsidy based on the information provided by the employer.

Doubt very much if anyone would ask an employee to answer these types of questions at OE. At OE the employer should have ALL employees complete the enrollment form, and for those who want to opt out of employer sponsored coverage, they will check off no coverage and should provide a reason, such as other coverage, due to cost, etc.

Running salaries is needed to determine the affordability testing, so they should do it.

As Chaz said, you have missed much. Don't know your situation, but you should start reaching out to whomever you can to get your arms around this stuff. Start with the govt websites (IRS, DOL, etc) as well as any vendor/partners you can. This forum is not a good place to get into this type of discussion because it is so deep and complicated. Good luck.

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