Model Notice of Exchanges Issued with New October 1, 2013 Deadline

The U.S. Department of Labor (DOL) issued Technical Release 2013-02 on May 8, 2013, providing temporary guidance and model notices that will allow employers to comply with another new requirement imposed by the Affordable Care Act (ACA). You may recall that the ACA requires employers to provide employees with a “Notice of Exchanges” by March 1, 2013. That deadline was postponed, pending coordination by the regulatory agencies charged with ACA enforcement. The DOL has now announced a new October 1, 2013 compliance deadline, along with model notices for employers to use pending further guidance.

Content

The ACA requires employers to provide all employees with a written notice containing information about the new insurance purchasing exchanges, now called the “Health Insurance Marketplace” or simply “the Marketplace.” That notice must describe the availability of a premium tax credit and the ramifications of securing coverage through the Marketplace. Employers are required to explain in the notice that employees may lose their employers’ non-taxable contribution to health benefits when they choose to purchase coverage through the Marketplace.

Timing

Employers are required to give the notice to current employees who are employed as of October 1, 2013, by October 1, 2013. For employees hired after October 1, 2013, employers must provide the notice within 14 days of the employee’s date of hire. The notice may be provided via first-class mail or electronically if the employer’s electronic distribution procedure is consistent with the DOL safe harbor requirements for electronic distributions.

Applicability

This new notice requirement applies to all employers that are subject to the Fair Labor Standards Act (FLSA). Generally, this includes employers that employ at least one employee and that engage in interstate commerce. Note that this is not the same definition of employer that is used for other purposes under the ACA and this notice requirement will apply to most employers. In addition, employers are obligated to provide the notice to all employees, regardless of whether the employer provides health coverage and regardless of whether the employee has full-time status, part-time status, and/or is eligible for health coverage.

Links to Model Notices

The DOL issued two model notices—one for employers that offer health plan coverage to employees and one for employers that do not. The model notice includes questions that must be tailored to the employer’s plan, as well as optional provisions specific to each employee that the employer may choose not to include. In addition, the DOL released an updated COBRA model election notice (clean version and redline version) that includes revised provisions to advise COBRA qualified beneficiaries about the availability of coverage through the Marketplace.