Access Health CT has approved a first-of-its-kind appeals process for businesses that claim to have been falsely penalized under the Affordable Care Act.
The penalties would stem from allegedly not offering what's known as "minimal essential coverage," an employer-sponsored health plan indended to be affordable for employees.
"We've heard from businesses about this," said Jennifer Herz, assistant counsel with the Connecticut Business and Industry Association. "We've gotten calls about it."
If employees turn down the coverage offered by their employers, purchase coverage on the state's exchange, receive tax credits and then say they couldn't get employee-sponsored health care, their employers could receive letters warning that the companies could be penalized.
The issue, according to Access Health CT, is that there hasn't been any kind of appeal process or system built into the ACA or at the state level. That changed Thursday.
“It’s really important that that employer has some kind of recourse to say, 'Yes, I do provide affordable coverage,' and by then they can avoid the tax penalty, because as of yet, there isn’t a whole lot of ability for the employer to avoid a potential tax penalty," explained Chad Brooker, who handles policy and strategy for Access Health.
It's not clear how many businesses in Connecticut have been fined in the past, but it is possible that that may have paid a penalty simply because there wasn't a way to fight it.
In the future, businesses can provide documentation to show that they do, in fact, provide some kind of option to their employees.
As for employees who qualify for tax credits who otherwise wouldn't if they accepted the employer sponsored coverage, Brooker said the IRS should take the lead.
“Then what the IRS should do is that they should look to the employee who said that they didn’t have access on that coverage and then see whether they got tax credits or not," he said. "If they got tax credits, then it’s the IRS' responsibility to actually work with the employee to pay back some or all of what those tax credits.”
Herz with the CBIA said the appeals process, which is in its infancy, is a welcomed step.
“I have heard from employers in Connecticut that get these letters and they’re very confused and they’re not sure why they’ve gotten them, because they have been providing good quality health insurance to their employees," she said, "so I hope this will help some of that confusion and figure out a way to move forward.”