Appealing “Pay or Play” Penalties

Both the Health Insurance Marketplaces and the Internal Revenue Service (IRS) have begun sending letters to employers to enforce the Affordable Care Act's employer shared responsibility provisions (also known as the "pay or play" provisions). Learn more about these letters below.

Health Insurance Marketplace Letters

Under the pay or play provisions, applicable large employers or "ALEs" (generally those with at least 50 full-time employees, including full-time equivalent employees) must offer health insurance coverage to their full-time employees and their dependents that meets certain minimum standards or pay a penalty.

Employers that get a notice from the Health Insurance Marketplace stating they may be subject to the penalty can file an appeal if they believe they offered coverage to an employee that is both affordable and that meets minimum value standards. However, an appeal does not determine if the employer is subject to a pay or play penalty, as only the IRS can make such determinations.

How Employers Can Appeal a Marketplace Decision