On May 8, 2013, the Department of Labor (DOL) provided temporary guidance and model notices that employers can use to inform their employees about the Exchanges, which will be available January 1, 2014. Please note that the Department of Health and Human Services (HHS) now calls the Exchange the “Health Insurance Marketplace,” and DOL refers to the notice as the “Employee Notice of Coverage Options.”
The original deadline for providing this notice to employees was
March 1, 2013. The effective date has been changed to October 1, 2013 to
coincide with the Exchange or Marketplace open enrollment period, which also
begins on that date. Employers who want to start providing notices sooner can
follow this temporary guidance and use these model notices. However, employers
are not required to provide notices under this temporary guidance and can wait
until formal guidance is provided later this year.
Impacted Employers
The notice requirement applies to all employers that are subject
to the Fair Labor Standards Act (FLSA). Most employers fall into this category,
but there are exceptions. The following link may assist employers in making
this determination: http://www.dol.gov/elaws/esa/flsa/scope/screen24.asp
Recipient and Distribution Requirements
This one-time notice must be provided to all current employees as
of October 1, 2013 and to new employees as they are hired. For 2014, if
the notice is provided within 14 days of an employee's start date, the notice
will be considered as having been provided at the time of hiring.
Employers must provide a notice to all full-time and part-time
employees, regardless of whether the employee is enrolled in an
employer-sponsored medical plan. Employers must provide this notice even if
they do not offer any health coverage to employees.
The notice does not have to be provided to employees’ dependents.
Notices must be in writing and can be delivered electronically by
the employer if the ERISA standards for electronic delivery are met.
What Must be Included in the Notice
There are two versions of the model notice:
·
Notice for employers
that DO offer medical coverage to some or all of their employees
·
Notice for employers
that DO NOT offer medical coverage to any employees
Employers can use the model notices or create their own notice as
long as the notice includes the following required information:
·
Verbiage that the
Exchange or Marketplace exists including a description of the services it
provides and direction for employees to visit HealthCare.gov for more
information.
·
Employees who purchase
coverage through the Exchange or Marketplace may be eligible for a premium
subsidy if their employer does not provide coverage that is “affordable” and
provides “minimum value.” Coverage is affordable if the employee-only option
for the lowest-cost plan offered costs less than 9.5% of an employee’s W-2
wages. Coverage provides minimum value if the plan pays at least 60% of allowed
charges for covered services.
·
Employees who purchase
coverage through the Exchange or Marketplace will pay for that coverage with
after-tax dollars.
·
If applicable,
information about the medical coverage the employer offers to its employees.
Changes to COBRA Notice
Employees and dependents who become eligible for COBRA will also
have the option to purchase coverage through the Exchange/Marketplace and
potentially receive a premium subsidy. The model COBRA notice that employers
and COBRA administrators use has been revised to include information about the
Marketplace.
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