Department of Labor Releases Model Notice of Exchange
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The Department of Labor (DOL) has released guidance and model notice language for employers (under Notice to Employees of Coverage Options) to use to meet the Affordable Care Act (ACA) employee exchange notice requirement.
Background
The ACA requires that employers must provide each employee with a written notice containing the information regarding exchanges, and possible subsidies when purchasing individual coverage through a public exchange: The statute requires that the following information be addressed in the notice:
- Informing the employee of the existence of the Marketplace (referred to in the statute as the Exchange) including a description of the services provided by the Marketplace, and the manner in which the employee may contact the Marketplace to request assistance;
- If the employer plan's share of the total allowed cost of benefits provided under the plan does not provide minimum values, the employee may be eligible for a premium tax credit if the employee purchases a qualified health plan through the Marketplace; and
- If the employee purchases a qualified health plan through the Marketplace, the employee would lose the tax free employer contribution to any health benefits plan offered, and premiums paid for individual coverage would be made on an after-tax basis.
The ACA required the notice be provided to employees by March 1, 2013, however on January 24, 2013, the DOL issued guidance delaying the notice requirement until after guidance was released.
- The guidance specifically states the notice may be provided by first-class mail, or electronically if the requirements of the DOL's electronic disclosure safe harbor are met.
- While this guidance does not specifically endorse the distribution of the notice directly to employees at the worksite, previous comments by the DOL have implied that distribution of the notice with other benefits and enrollment material would be allowed. Further clarification from the DOL regarding this possible method of distribution would be helpful.
- The notice must be provided to all employees, full time and part time, regardless of enrollment status. Employers are not required to provide the notice to spouses and/or dependents.
Effective Date
Employers are required to provide the notice to current employees no later than October 1, 2013. Employers are also required to provide the notice to each new employee at the time of hiring beginning October 1, 2013. For new hires, a notice provided within 14 days of an employee's start date will be considered timely through the end of 2014 (pending additional guidance).
Related Links:
The McCart Group will continue to update you on the regulations as they are released.
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