Employers Must Provide Exchange Notices to Employees [By October 1, 2013]

Employers Must Provide Exchange Notices to Employees [By October 1, 2013]

The Affordable Care Act requires that employers notify their employees about Exchanges. Notices were supposed to go out March 1, 2013, but the Department of Labor delayed the requirement to late summer or fall of 2013.  On May 8, 2013 the Department of Labor announced the new deadline of October 1, 2013 and temporary guidance as well as a model notice for employers who offer a health plan to employees.

Most employers1 are required to provide a notice to all employees regardless of their enrollment status or part-time or full-time status.  As stated in the guidance, the notice must be provided to each new employee within 14 days of hire, beginning October 1, 2013.

Guidance indicates the content of the notice must include information regarding the existence of the Health Insurance Marketplace, also known as Exchange.  The notice must also inform the employee that the employee may be eligible for a premium tax credit if the employee purchases coverage through the exchange, however the employee may lose the employer contribution to any health benefits plan offered by the employer and that all or a portion of such contribution may be excludable from income for Federal income tax purposes.

While the guidance and model notices provide long-awaited answers, there are still remaining questions before employers should feel comfortable distributing notices.   Business Benefits Insurance Solutions will continue to monitor the situation and will provide updates in advance of the deadline.

1Employers who are not subject to FLSA (Fair Labor Standards Act) are not required to provide this notice.

A model notice was also provided for employers who do not offer a health plan. Also released was a new COBRA model election notice to include additional information regarding health coverage alternatives offered through the Exchange.