Viewing posts from: July 2016

What it Means if You Received a Marketplace Notice

Posted July 28, 2016 by Megan DiMartino

Businessman with money in purse in hands on a gray background

The first round of notices from the federally-facilitated health insurance exchange (also known as the Marketplace) have been sent out at the end of June.

If you received one of these notices, it is because the named individual:

  • purchased individual health insurance through a Marketplace (;
  • is getting (or is asking to get) federal premium assistance to reduce monthly premiums for that health insurance;
  • named your company as his or her employer; and
  • told the Marketplace that he or she did not receive an offer of affordable, minimum value health coverage from your company or any other employer.


Am I required to appeal a Marketplace Notice?
It’s your choice, but your are not required to appeal a Marketplace Notice.

Should I appeal a Marketplace Notice?
You can consider appealing if you made an offer of affordable, minimum value coverage to the individual named in the Notice for one or more months in 2016. Here’s why:

  • It may help the employee avoid a tax bill. When you file the 2016 Form 1095-Cs, the IRS will see that your company offered the employee affordable, minimum value health coverage. If the IRS determines that the employee was not entitled to premium assistance, they will ask the employee to repay part (or, in some cases, all) of the premium assistance. This repayment obligation can be a substantial, avoidable burden on the employee. Better to get the facts now.
  • It may help avoid a later IRS appeal process related to the employer penalty. If the Marketplace and the employee find out that the employee is not entitled to premium assistance and the employee does not in fact get premium assistance, the IRS won’t have any reason to contact you about that employee after year end.

The Marketplace Notice appeal process is run by the Department of Health and Human Services (HHS) and is intended to determine whether the named individual is or is not entitled to premium assistance to purchase health insurance in the current year. The Marketplace is purely interested in facts that show the named individual is not eligible for premium assistance in 2016, and more specifically if the individual was offered affordable, minimum value health coverage. The appeal should identify the months that the individual elected coverage or could have elected coverage (even if they waived coverage). Appeal forms and additional information is available at

When shouldn’t I appeal a Marketplace Notice?
There is no use in appealing a Marketplace Notice for an individual who was not offered affordable, minimum value health coverage in 2016 – nothing will impact whether the IRS will assess an unaffordable/inadequate coverage penalty.

What if I hear from the IRS?
The IRS will administer a separate notice and appeals process before assessing the employer pay or play penalty under Code §4980H(b). A notice from the IRS regarding potential pay or play penalties proposes attention – expect to see IRS notices later this year regarding these penalties that occurred during 2015.

Employer Pay or Play Penalties Under IRC §4980H(b)
The “pay or play” penalty is imposed when an employer offers health coverage that is unaffordable/inadequate (i.e., doesn’t provide minimum value) and a full-time employee buys health insurance through the Marketplace with premium assistance.

  • For 2015 – $260 penalty for each month that the full-time employee got premium assistance
  • For 2016 – penalty is raised to $270, but the IRS won’t attempt to assess these penalties until 2017
  HHS Marketplace Notice IRS Notice
Purpose of the
appeals process:
The Marketplace wants to determine
whether the named individual is
eligible for 2016 premium assistance.
The IRS wants to determine
whether the employer is liable for
a 2015 pay or play penalty for
failing to offer affordable,
minimum value coverage to an
individual who was a FT
employee in 2015.
Timing: Expect to get additional Marketplace
Notices throughout the year (when
an individual applying for premium
assistance names your company as
his or her employer).
IRS notices are expected later
this year.
Notices will be
sent to:
Address provided by the individual Address listed in 2015
Form 1094-C
Reasons to
The employer offered affordable,
minimum value coverage to the
individual for one or more months
in 2016.
The employer believes it is not
liable for 2015 unaffordable/
inadequate coverage penalty.
Reasons include:
– Individual was not employed
in the months in question
– Individual was not a FT
employee in the months in
– Individual was enrolled in
the employer’s coverage in
the months in question
– The employer offered
affordable, minimum value
coverage for the months in
  • A health plan is “affordable” if the employee contribution for single coverage does not exceed 9.56% (in 2015) or 9.66% (in 2016) of an employee’s household income. Since the employer will not know the employee’s household income, the IRS provided three affordability safe harbors (Federal Poverty Line, Rate of Pay and Form W-2). If an employee was eligible for but waived affordable, adequate coverage in 2015, Line 16 of his or her Form 1095-C should have a code for the applicable safe harbor.
  • A health plan provides “minimum value” if: (a) it is designed to pay at least 60% of the total cost of medical services for a standard population; and (b) it provides substantial coverage of physician services and inpatient hospitalizations. This is generally equivalent to a bronze level plan sold in the Marketplace.

Source: Vorys | Labor and Employment Alert: Back to Basics – Why I am getting this Marketplace Notice?

Links: Exchange Subsidy Notice

For more information contact The information contained in this post, and any attachments, is not intended and should not be misconstrued as legal advice. You should contact your employment, benefits or ERISA attorney for legal direction.

AP Benefit Advisors Blog: AssuredPartners Webinar | Affordable Care Act: Reporting Requirements and Issues to Watch in 2016

Posted July 25, 2016 by Megan DiMartino

AP Logo LargeComplying with the Affordable Care Act (ACA) reporting requirements has proven very challenging for most employers. Timely distributing accurate Forms 1095-C and filing Forms 1094-C with the Internal Revenue Service (IRS) may not have been possible for many employers. In this webinar, we’ll discuss where we are in the process and how to address errors, prepare for possible penalty assessments, and change procedures to make 2016 reporting smoother. In addition, the Administration continues to issue FAQs and other guidance on the complexities involved with complying with the ACA rules. We’ll also discuss recent developments related to ACA compliance, including premium payment plans, opt-out payments and avoiding the employer play or pay penalties.

Webinar Details:

  • Wednesday, July 27, 2016
  • 3:00 – 4:00pm EDT
  • No Cost to Attend

Register Now - CA Blue

About the Presenter:

Sarah Roe Sise is a partner at Armstrong Teasdale in St. Louis, MO. Sarah practices exclusively in the heavily regulated and constantly evolving field of employee benefits and executive compensation. She advises a wide range of clients, including closely-held companies, tax-exempt organizations and public companies.

Sarah brings over 17 years of experience to the firm and partners with clients to establish, design and implement qualified retirement plans, non-qualified arrangements, welfare and fringe benefit plans, and executive compensation programs. She also counsels clients designing plans to best serve the client’s workforce, complying with the complicated regulatory schemes that govern these benefits, and problem-solving for the myriad issues that arise from employers offering a broad range of benefits and incentive compensation programs. By monitoring and analyzing new legislation and regulations, Sarah is able to provide strategic, on-going counsel regarding compliance, employee communication and general operation of these plans.

For more information contact The information contained in this post, and any attachments, is not intended and should not be misconstrued as legal advice. You should contact your employment, benefits or ERISA attorney for legal direction.

Feds Propose Significant Changes to Form 5500

Posted July 21, 2016 by PHaynes

DOL_IRS_PBGCIn today’s Federal Register the Departments released their Notice of Proposed Forms Revisions to the Form 5500 Annual Return/Report Series.  The Departments, for purposes of this notice are the DOL (Department of Labor), the IRS (Internal Revenue Service), and the PBGC (the Pension Benefit Guaranty

Corporation).  This new guidance affects retirement plans, health plans, and other welfare plans.  When the DOL advised this guidance was coming (see their 7/11/2016 Fact Sheet), they stated these proposals are intended to improve employee benefit plan reporting by requiring more detailed information on issues such as group health plan compliance, plan investments, and service provider fees.

Let’s review some highlights.

Increased Group Health Plan Filing Obligations

  1. The proposal would require Form 5500 reporting by all ERISA group health plans (including those now covered by the filing exemption for small unfunded, insured, or combination unfunded/insured welfare plans), including a comprehensive new Schedule J (Group Health Plan Information).
  2. Schedule J would indicate the types of health benefits offered and the funding method, including information about participant and employer contributions, and whether the plan is insured, uses a trust, or pays benefits from the employer’s general assets.
  3. This will include information about the Controlled Group’s name, and EINs for the controlled group’s members (name, EIN, and percent of total contributions by each member of the control group).
  4. This plan offers health coverage to (check all that apply):  (a) employees, (b) spouses, (c) children, (d) retirees, (e) retirees only.
  5. Indicate benefit types (check all that apply):  (a) medical/surgical, (b) mental health/substance abuse, (c) pharmacy or prescription drug benefits, (d) wellness, (e) preventive care, (f) emergency care, (g) pregnancy benefits, (f) vision, (g) dental.
  6. Health funding type:  insured, self-insured [(a) employer contributions, (b) employee contributions, (c) a mix of both employer and employee contributions, (d) a trust, etc..
  7. Does the plan claim to be a PPACA-Grandfathered-Plan?
  8. Plan types offered/included:  HDHP, HRA, Health Care FSA.
  9. How many people were offered COBRA during the year?  Of those, how many elected?  How many participated as COBRA QBs?
  10. Did the plan receive any rebates, reimbursements, or refunds other than those reported on Schedules from Service Providers to the Plan?  If YES, how much?

The PDF of the guidance (linked below) is some 149 pages long, but we’ve extracted the new Schedule J requirements which are detailed here in just 3 pages.

In addition, most filings (except those for small fully insured plans) would have to provide financial and claims information, and list TPAs, stop-loss carriers, and other plan service providers such as mental health or substance abuse benefit managers. These filers must also answer questions about compliance with HIPAA, GINA, the mental health parity rules, health care reform, and other mandates, including specific questions about SPD and SBC compliance.

Retirement Plan Changes – Applies to 401(k) Plans

Within the main body of the Form 5500, the forms will request additional data about participant accounts, contributions, and distributions. Filers will need to communicate about the type/setup of their retirement plan., such as whether their plans use safe harbor or SIMPLE designs, or include Roth, investment education, or investment advice features. Information would also be requested about offset and 414(x) plans, default investments, rollovers used for business start-ups (ROBS), leased employees, and pre-approved plans.

  • There will be a separate Schedule E used for ESOP reporting.
  • Schedule R would include new questions about participation rates, matching contributions, and nondiscrimination.

Proposals that Will Apply to All Plan Types

Separate Schedules C.  A separate Schedule C will be filed for each service provider to the plan, and, these revisions will more closely follow the service provider disclosure rules.  This Schedule C filing requirement will be extended to some small plans currently exempt from filing it.

Schedule H will be expanded to include questions on fee disclosures, leveraged asset acquisitions, annual fair market valuations, designated investment alternatives, investment managers, plan terminations, asset transfers, administrative expenses, uncashed participant checks, SPDs, and other topics. It would also distinguish between assets held for investment and those that were sold during the year.

Schedule I will be eliminated; small plans that currently file Schedule I would generally need to file Schedule H instead.

Plans that invest through a direct filing entity (DFE) would no longer be required to file Schedule D; DFEs would still file Schedule D.


Want to send the Government your Comments?

If you wish to comment on this proposed guidance, your written comments must be received by the Department of Labor by October 4, 2016.  The Departments realize that these changes will significantly increase your Form 5500 reporting obligations (especially for group health plans) so please include information about how you will cope with these new requirements (such as the cost and feasibility of providing the details required).  These new “transparency” and “quality” measures are another way for the Departments to extract, quantify and cross reference reports from your 1094s, 1095s and reports received from taxpayers making purchases through federal and state exchanges (Marketplaces).

If you wish to comment, please use the hyperlinks at the bottom of the html-version of the notice of proposed rules.  All comments received are made public when the comment and review period closes.

When does all this change become effective?

These changes are currently targeted to take effect with the 2019 plan year filings.  Also, proposed revisions to the ERISA reporting regulations are expected so that the proposed Form 5500 changes will conform to ERISA’s requirements.

Our clients can rest assured that we have long complied with the IRS/DOL’s guidance regarding Schedule C disclosures and routinely include a Schedule C for all self-funded plans where if and when they include any participant funds (payroll contributions that become plan assets), etc., and for any and all Service Providers to the plan that earned $5,000 or more for that plan year.  And, when the 2019 plan year reporting approaches, we will incorporate the new Schedule J requirements into your reporting packages.

Should you have questions or concerns, please contact your Account Manager or Sales Executive.





Maryland Moving to Pass Equal Pay for Equal Work Act

Posted July 15, 2016 by Megan DiMartino

Symbol Scales is made of stones of various shapes

Maryland Governor, Larry Hogan, along with the Maryland General Assembly and other labor and business leaders throughout the state, have moved forward in passing the Equal Pay for Equal Work Act. The law couldn’t come at a more appropriate time where Maryland women are making on average 84.3 cents for every dollar a man makes. It’s far less for women of color in America – Asian-American women make about 82.2 cents, African-American women 69 cents, and Latinas 47.1 cents on the dollar.

Secrecy has long been the iron veil for workplace equality and makes it impossible for women to know if they are being underpaid compared to their male counterparts. With this new law the veil has been lifted and allows employees to ask about, discuss, or request wage information without being retaliated against or fired. It also prohibits employers from forcing employees to sign a waiver regarding the ban on wage discussions or information requests.

Not only does this law cover discriminatory wage gaps, it covers discriminatory employment opportunities by banning “mommy tracking.” This is to stop employers from providing less favorable positions and career tracks, failing to provide promotion or advancement opportunities, or depriving an employee of employment opportunities based on an employee’s sex or gender identity.

Susan C. Lee, Maryland State Senator, writes: “We in Maryland are proud of our history of passing progressive legislation to uplift and empower all hardworking people. Our Equal Pay for Equal Work Law is about fundamental fairness and will help close discriminatory wage gaps; enable women to support themselves and their families; strengthen our middle class by boosting the local economy; and ensure workplaces promote transparency, fairness, merit and productivity.”

Source: U.S. Department of Labor Blog | Equal Pay for Equal Work in Maryland

For more information contact The information contained in this post, and any attachments, is not intended and should not be misconstrued as legal advice. You should contact your employment, benefits or ERISA attorney for legal direction.

Did You Receive an Exchange Subsidy Notice? Ready to Appeal?

Posted July 8, 2016 by PHaynes


Please see our Compliance Alert about the need to timely appeal subsidy notices.  If your employees incorrectly tell a federal or state exchange that you didn’t offer them coverage, or that your coverage wasn’t creditable or wasn’t affordable, then there’s a good chance that you will face a fine.  You need to appeal these subsidy determinations timely.

Please see the attached Compliance Alert for some direction, tools and resources.  Thank you.

AP Benefit Advisors, LLC – Compliance Alert – Appeal of Exchange Subsidy Notice

HRCI & SHRM Pre-approved AP Benefit Advisors Webinar Series: Navigating the New FLSA Overtime Rules

Posted July 7, 2016 by Megan DiMartino

Closeup of hands on clock face

Join AP Benefit Advisors’ Manager of HR Professional Services, Cindy Wagner, for a complimentary, 1-hour, HRCI* and SHRM** pre-approved webinar as she reviews the latest update for the Fair Labor Standards Act (FLSA) regarding overtime provisions. The FLSA was first established in 1938 and is enforced by the U.S. Department of Labor’s Wage and Hour Division. The law covers more than 135 million workers at more than 7.3 establishments nationwide. Many HR professionals spend countless hours maintaining compliance with various laws and regulations. This webinar will assist in highlighting the key areas of the FLSA requiring attention by the anticipated deadline of December 1, 2016.

Topics will include:

  • A baseline review of the FLSA – history and intent of the law
  • Review of the final FLSA Overtime rules
  • New thresholds for exemption status
  • Impact on business operations
  • Considerations for compliance with new requirements

Webinar Details:

  • Wednesday, July 20, 2016
  • 1:00 – 2:00pm EDT
  • No Cost to Attend
  • This webinar is open to all HR and Finance Professionals – but not to brokers, agents, TPAs and PEOs.

Register Now - CA Blue

hrci_ap_preapprovedseal_2016_new*The use of this seal confirms that this activity has met HR Certification Institute’s (HRCI) criteria for recertification credit pre-approval. This activity has been approved for 1 HR (General) recertification credit hours toward aPHR, PHR, PHRca, SPHR, GPHR, PHRi, and SPHRi recertification through HRCI.

SHRM SEAL-Preferred Provider Recert_CMYK_2016_1.25in (R)**AP Benefit Advisors is recognized by SHRM to offer Professional Development Credits (PDCs) for SHRM-CP or SHRM-SCP. This program is valid for 1 PDC for the SHRM-CP or SHRM-SCP. For more information about certification or recertification, please visit

For more information contact The information contained in this post, and any attachments, is not intended and should not be misconstrued as legal advice. You should contact your employment, benefits or ERISA attorney for legal direction.

Health & Welfare Civil Penalties Updated

Posted July 6, 2016 by PHaynes

dept-of-laborHealth & Welfare Civil Penalties Updated

On July 1, 2016, the USDOL (Department of Labor) issued an interim final rule that significantly increases the amount of various civil penalties applicable to certain ERISA violations.   The increased amounts, which have been adjusted for inflation pursuant to the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended, apply to penalties assessed on and after August 1, 2016.   The increases include penalties for the following (as they related to Health & Welfare plans):

  • Failure to file a Form 5500:  $2,063/day (up from $1,100/day)
  • Failure to file a Form M-1:  $1,502/day (up from $1,100/day)
  • Failure to provide documents requested by the Secretary of Labor: $147/day subject to a $1,472 maximum. (up from $110 per day subject to a $1,100 maximum)
  • Failure to comply with the Genetic Information Nondisclosure Act: $110/day/person (up from $100/day/person) subject to a minimum $2,745/day/person (up from $2,500/day/person) for de minimis violations and $16,473/day/person (up from $15,000/day/person) for violations that are more than de minimis; and further, in the case of unintentional failures, subject to a maximum of the lesser of 10% of the aggregate amount paid by the plan sponsor for group health plans ion the prior fiscal year of $549,095 (up from $500,000).
  • Willful failure to provide a Summary of Benefits and Coverage: $1,087 per failure (up from $1,000 per failure).

Additional Links and Resources:

Fourth of July Trivia!

Posted July 1, 2016 by Megan DiMartino

Sparkler and FlagTime to put on your Uncle Sam thinking caps! No peeking at the answers!

1. What historical event do Americans celebrate on July 4th?
a. Official signing of the Declaration of Independence
b. George Washington’s birth
c. The official adoption of the National Anthem
d. Formal adoption of the Declaration of Independence

2. When were fireworks first used in an official Fourth of July celebration?
a. 1777
b. 1812
c. 1906
d. 1941

3. How many presidents have passed away on the Fourth of July?
a. 5
b. 1
c. 0
d. 3

4. The Star-Spangled Banner, written by Francis Scott Key, was originally a poem titled…
a. America’s Victory
b. In Triumph Shall Wave
c. The Defense of Fort McHenry
d. Broad Stripes and Bright Stars

5. Who is the only president to be born on Independence Day?
a. Ronald Reagan
b. Calvin Coolidge
c. William McKinley
d. George Washington

6. True or False: There is more than one copy of the Declaration of Independence.


1. d. Formal adoption of the Declaration of Independence – On July 2, 1776, the Continental Congress voted to approve a motion by Virginia to separate from Great Britain. Two days later, the declaration proclaiming the independence of the United States of America from Great Britain and its king was formally adopted by 12 colonies. It wasn’t until almost a month later that the actual signing of the document took place.

2. a. 1777 – Congress authorized using fireworks to help mark the first anniversary of the adoption of the Declaration of Independence. The first celebration took place in Philadelphia with fireworks, bonfires and bells.

3. d. 3 – James Monroe, John Adams & Thomas Jefferson. Adams, 90, and Jefferson, 83, both died within hours of each other on July 4, 1826 – the nation’s 50th anniversary.

4. c. The Defense of Fort McHenry – The poem was later put to music of an English drinking tune called “To Anacreon in Heaven,” and officially adopted as the national anthem in 1931.

5. b. Calvin Coolidge – The 30th president was born July 4, 1872, in Plymouth Notch, VT.

6. True – Philadelphia printer, John Dunlap, was put in charge of creating copies of the Declaration of Independence to be dispersed across the 13 colonies to newspapers, local officials and the commanders of the Continental troops. The rare documents, know as “Dunlap broadsides,” predate the engrossed version signed by the delegates. Of the hundreds thought to have been printed on the night of July 4, only 26 copies survive – one recently found in the back of a picture frame and sold for $8.1 million in 2000.

Wishing you a happy and safe Fourth of July!!!

Sources: The Mercury News Lifestyle | Five fun Fourth of July Facts
AARP | How Much Do You Know About the Fourth of July?
History | 9 Things You May Not Know About the Declaration of Independence 

For more information contact The information contained in this post, and any attachments, is not intended and should not be misconstrued as legal advice. You should contact your employment, benefits or ERISA attorney for legal direction.

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