By October 1, 2013, virtually all employers must provide a notice to their employees explaining the health insurance exchanges that will begin open enrollment on October 1, 2013.
The Department of Labor (DOL) recently provided guidance on this notice, required under the Patient Protection and Affordable Care Act (also known as Health Care Reform). Under this guidance, employers subject to the Fair Labor Standards Act (which generally includes all employers) must provide a notice to employees with the following information:
- An explanation of the health insurance exchanges, including contact information and a description of the services provided.
- The potential availability of premium tax credits for insurance coverage purchased on a health insurance exchange.
- A statement that if the employee purchases coverage on a health insurance exchange, he or she will lose any employer contribution available through employer-sponsored coverage and that employer-sponsored coverage is paid for on a pre-tax basis.
Employers should note the following:
- The DOL has provided two model notices. One of the model notices is for employers with health plans (http://www.dol.gov/ebsa/pdf/FLSAwithplans.pdf) and the other notice is for employers without health plans (http://www.dol.gov/ebsa/pdf/FLSAwithoutplans.pdf).
- The model notices include blanks for employers to insert information about the employer and any employer-sponsored coverage available to the employee. This information is not required to be provided but will be helpful for employees who consider obtaining coverage from a health insurance exchange.
- The notice must be provided to all employees, regardless of part-time or full-time status.
- The notice may be provided in writing or, in some circumstances, it may be provided electronically to employees who either consent to electronic delivery or who use the electronic delivery system (e.g., email) as an integral part of their work.
- New employees hired on or after October 1, 2013, must receive the notice within 14 days of the employee’s start date.
- The DOL has also provided a revised model COBRA election notice. Employees and their dependents that become eligible for COBRA coverage are required to be provided a notice explaining that they may elect COBRA coverage. The DOL has revised its model election notice to include an explanation of the availability of the health insurance exchanges.
Beginning in 2014, shared responsibility penalties could apply to large employers based on inaccurate information reported by employees applying for exchange coverage. The exchange notice is a good opportunity for employers to provide accurate information regarding employer-provided coverage so that employees are less likely to report inaccurate information to an exchange. We suggest employers customize the notice to provide the information that will be requested by the exchange and to clearly explain whether employer-provided coverage will prevent an employee from obtaining subsidized exchange coverage. Please let us know if we can help you customize your notice.
For more information about this article or any other health care reform issues, please contact a member of our health care group or call 208.344.6000.