Under temporary guidance issued May 8, 2013, by the U.S. Department of Labor (DOL), beginning no later than October 1, 2013, employers must give a written notice to each employee (regardless of the employee's plan enrollment status, if applicable, or of part-time or full-time status), providing information about coverage options under the state and federal health benefits exchanges (referred to as "the Health Insurance Marketplace" or "Marketplace").
The Marketplace, designed to expand access to affordable health care coverage, is the program implemented by the Patient Protection and Affordable Care Act (PPACA) that provides a "one-stop shopping" experience that allows for easy comparison of health insurance options in the private health insurance market.
Under PPACA, the notice must inform employees of three things:
- It must inform them of the existence of the Marketplace, 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 costs of benefits provided under the plan is less than 60 percent of such costs, that 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 may lose the employer contribution (if any) 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.
The notice deadline of October 1, 2013, is the date when "open enrollment" begins for coverage through the Marketplace. For new employees, effective October 1, 2013, employers must provide the notice at the time of hiring. For 2014, if the notice is provided within 14 days of the employee's start date, then the DOL will consider the notice to be provided at the time of hiring.
The notice must be provided to employees in writing and at no charge to the employees. Further, the notice may be provided by first class mail, or alternatively, it may be provided electronically, as long as the requirements of the DOL's electronic disclosure safe harbor are met.
To assist employers with complying with the notice requirement, the DOL has provided on its website two model notices that meet the notice content requirements discussed above: (1) the model notice for employers that do not offer a health plan, available at: www.dol.gov/ebsa/pdf/FLSAwithoutplans.pdf., and (2) the model notice for employers who do offer a health plan to some or all of their employees, available at: www.dol.gov/ebsa/pdf/FLSAwithplans.pdf. Employers are allowed to use one of these models, as applicable, or a modified version, provided that the notice meets the content requirements above.
The same temporary guidance discussed above also announced an updated model election notice that health plans must provide to inform employees about continued health care coverage under the COBRA. The election notice, which describes the rights of employees to continuation coverage and how to make an election, must be provided to qualified beneficiaries within 14 days after the plan administrator receives the notice of a qualifying event under COBRA. The language of the election notice was updated to incorporate changes made by the PPACA. The model election notice is available in modifiable, electronic form on the DOL's website at www.dol.gov/ebsa/cobra.html.
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