Affordable Care Act: Employers Required to Provide Notice of Health Insurance Exchanges
Although the Obama Administration announced last week that it will delay implementation of some employer mandate and penalty provisions of the Patient Protection and Affordable Care Act (ACA) until 2015, other requirements remain in place and on schedule.
For example, by October 1, 2013, all employers who are subject to the Fair Labor Standards Act (FLSA) (which applies to virtually all businesses with $500,000 or more in gross annual revenues) must provide a written, individualized notice to all employees advising them of the existence of and benefits available through government-sponsored Health Insurance Marketplaces (or “Exchanges”). Open enrollment for the Exchanges is still scheduled to begin on October 1, 2013.
The “Exchange Notice” must be sent to all employees, full-time or part-time, regardless of whether the employer is subject to the health insurance mandate (now delayed) and must contain certain information regarding the Exchanges, including a description of services provided and contact information. The notice also must inform employees that they may be eligible for a premium tax credit if they purchase a qualified health insurance plan through an Exchange. In addition, the notice must state that, if the employee purchases a qualified plan through an Exchange, the employee may lose any employer contribution to any employer-offered health benefits plan and all or a portion of such contribution may be excludable from federal income tax. Model language for the Exchange Notice is available on the Department of Labor website at www.dol.gov/ebsa/healthreform.
Employers must provide notice to current employees not later than October 1, 2013, and to new employees at the time of hiring beginning on that date. Beginning in 2014, the notice will be considered timely if provided within 14 days after the date of hire.
Employers also will be subject to other requirements regarding benefits and reporting, including health plan coverage and design mandates, provisions for pre-existing conditions and waiting periods, distribution of benefits and coverage summaries, and W-2 reporting of insurance benefits provided. So far, these requirements remain on schedule for 2014.
For more information, contact Chris Arbery.