If you think navigating the Affordable Care Act (ACA) from anemployer's perspective can be intimidating, you're not alone. Withthe filing of 1094s and 1095s for the 2015 tax year behind you, HRand benefits professionals are faced with tackling the next ACAcompliance hurdle: managing employee subsidy notifications andappeals.

The Federal and some State Exchanges have already begun sendingnotifications, leaving many organizations to sort through amultitude of additional ACA complexities, not to mention paperwork.Now is the time to make sure you're prepared to handle this newprocess of managing subsidy appeals. Why? Because when a subsidy –also known as an Advance Premium Tax Credit – is awarded, it maytrigger an IRS fine down the road.

To make sure you're best prepared, you'll want to understand 4key steps in the process:

Step 1: Employer receives a notice

If your employee applies for and receives a subsidy, you will bemailed a notice. To clarify, this will be a hard copy sent via thepostal service (electronic notices will likely happen in thefuture). The process gets tricky very quickly, as notificationswill be mailed to the address the employee listed on their subsidyapplication, which may be their work location and not yourheadquarters or HR location. Because you only have 90 days from thedate on the notification to respond, you'll want to make surenotices can quickly and efficiently be directed (or re-directed) tothe right location and contact.

Step 2: To appeal or not to appeal?

When the notification finally hits your desk, you'll want toreview it and decide whether or not you want to appeal the subsidy.Ask yourself questions like, “Was this employee actually eligiblefor benefits? Did we offer this employee minimum essential coverage(MEC)? Did our coverage meet both the affordability and minimumvalue requirements?”.

Appealing a subsidy isn't necessarily harmful to an employee. Infact, you may be helping the employee out. If they received asubsidy and weren't supposed to, they may need to repay some (orall) of the subsidy amount back when they file their taxes – anexpense they may not be prepared to take on.

Appealing may also help prevent unwarranted fines from impactingyour organization down the road.

Step 3: Filing an appeal

Once you've decided it's appropriate to file an appeal, you'llnext complete and submit appeal forms and documentation to theappropriate Exchange within the 90 days of the date on the notice. Keep in mind that forms can vary between Federal and StateExchanges. The Employer Appeal Request Form, which is used by theFederal and most State Exchanges, will ask for information aboutyour organization, the employee whose subsidy you're appealing, andwhy you're appealing it. Once sent, the Exchange will notify bothyou and the employee that the appeal was received.

Step 4: Appeal is reviewed, a decision is made

The Exchange will now review your case and make a decision. Insome cases, the Exchange may choose to hold a hearing. When adecision is finally reached, both you and your employee will benotified. However, it doesn't necessarily end there. Your employeeis entitled to their opportunity to appeal the Exchange's decisionwith the Department of Health and Human Services (HHS). If HHS optsto hold a hearing, you may be called to testify. In this situation,HHS will review the case and make a final decision. If HHS findsthat your employee isn't eligible for the subsidy, your employeemay have to repay the subsidy amount. Or, if HHS finds the employeeis indeed eligible for the subsidy, it's critical for you to keepyour appeal on file since this may result in a fine from theIRS.

Think this sounds complicated? Again, you're not alone. In arecent survey conducted by Equifax, 30% of respondents citedspending 240+ hours (that's 30+ days!) on ACA management, includingemployee subsidy notifications. This particular piece of managingcompliance can become a substantial time investment, yet if notmanaged well, there could be additional impacts in the form offines down the road. Set yourself, your HR team, and your employeesup for success by ensuring you have the proper knowledge,processes, and technology in place to most effectively handle ACAsubsidies.

Learn more about ACA subsidies in this guide book.