If you are an employer with over 50 employees, you have to be in compliance with the Employer Shared Responsibility terms of the Affordable Care Act (ACA). This means that you have to offer minimum value affordable healthcare to your employees.

If any of your employees decide to seek subsidized healthcare through the Insurance Exchange (aka Insurance Marketplace) and he gets a subsidy from the health coverage, you will receive an Exchange Notice. So, what does this mean? What should to do if we receive Exchange Notices?

When you receive an Exchange Notice, you have two options: first, you can pay the corresponding fine to the IRS or, secondly you can appeal to the Exchange or the Department of Health and Human Services.

If you decide to appeal in order to prove that you comply with all the requirements of the ACA, you will have to gather information regarding HR, Payroll, Benefits plan and Leaves, in order to prove that the employee was offered an affordable coverage at the minimum value and to prove his/her salary. Once you have all the information, the reconciliation process requires huge amounts of paperwork that must be fulfilled in a very short period of time. The employer must then wait for a response, which can be successful for the company or unsuccessful: if it is successful you avoid the IRS fine (although the Government may try to get the subsidy money back from the employee), if it is unsuccessful you will have to pay the fine.

This process is very time-consuming and cumbersome for companies. This is why partnering with a Professional Employer Organization (PEO) like The HRB Group can be beneficial for companies, as they avoid all these challenging processes, which, in some cases, are multiple cases. For those companies working with PEOs, this process is something they won’t have to worry about because it is the responsibility of the PEO to take care of everything.