Health Exchange Notification Due Oct 1 – Employers Must Distribute Required Exchange Notice
If your organization hasn’t done so already, you have until October 1 to inform employees about their option to enroll in a public health exchange under theAffordable Care Act.
Notice Must Be Provided to Current and New Employees. Following a delay in the original effective date, employers will need to comply with the new requirement to provide each employee a written notice with information about a Health Insurance Exchange (also known as a Marketplace) beginning this Fall.
Employers are required to provide the written notice to each current employee not later than October 1, 2013, and to each new employee at the time of hiring (within 14 days of the employee’s start date) beginning October 1, 2013. Two model notices are available from the U.S. Department of Labor:
Employers must provide the notice to each employee regardless of plan enrollment status (if applicable) or of part-time or full-time status. Employers are not required to provide a separate notice to dependents or other individuals who are or may become eligible for coverage under the plan but who are not employees.
The notice may be provided by first-class mail, or, alternatively, it may be provided electronically if certain requirements are met. More information on the notice requirement is available from the U.S. Department of Labor.
IMPORTANT: The model notice contains an optional section about employer-sponsored coverage details. The model notice is three pages long and contains an optional section on page three (questions 13 though 16). An employer is in no way obligated to provide the optional information requested on the model notice. Also, an employer may modify the notice as long as the end result corresponds to the overall basic content guidelines. However, the employer should carefully weigh the value of providing additional information about the cost and value of the employee’s group health plan options.
Technically, the law does not impose any fines for failing to provide the notices. However, the Affordable Care Act is intertwined with other laws (this particular provision is embedded in the FLSA in a new section, 8A), so it is considered a good idea to comply to avoid possible legal complications.
Who Must Receive the Notices?
Notices must be given to all employees, whether or not they work full time, and regardless of whether they are currently receiving health benefits. The October 1 deadline is to give these notices to all employees. After October 1, the notices must be given to new hires within two weeks of coming on board.
The notices must “be provided in writing in a manner calculated to be understood by the average employee,” says the Department of Labor (DOL) in Technical Release 2013-02. They can also be provided via e-mail, but only to employees for whom accessing e-mail is “an “integral part of the employee’s duties” and who can access the system easily.
Which Employers Must Send the Notices?
The notice requirement must be met by employers that must comply with theFair Labor Standards Act (FLSA). In general, the FLSA applies to employers with one or more employees who are engaged in, or produce goods for, interstate commerce. For most firms, a test of not less than $500,000 in annual dollar volume of business applies.
The FLSA also specifically covers the following: hospitals; institutions primarily engaged in the care of the sick, the aged, mentally ill, or disabled who reside on the premises; schools for children who are mentally or physically disabled or gifted; preschools, elementary and secondary schools, and institutions of higher education; as well as federal, state and local government agencies.
The DOL has issued a pair of model notices you can use. One is for employers which currently offer health benefits and another for those which do not. On Part B of the forms, you will see information the employees will need if they plan to purchase coverage on the exchange, assuming they are eligible.
The Part B information would allow employees who apply to their state’s exchange (or the federal version, if no state-run exchange exists) to complete a required questionnaire to determine their eligibility for the program.
The model notice for employers that do currently offer health coverage features a lot of slots for information about your health plan in Part B. Since the law doesn’t actually require you to provide the information, and because some of the information may be hard to dig up employers may decide to disregard some or all of Part B, especially if the information is uncertain or likely to change, employers to be “cautious about volunteering too much information.”
Ask us about our Online Notification Tool developed by our payroll partner. Be sure to visit our section on Health Care Reform for information on other notices required to be provided and to download additional model notices available for employers and group health plans.