Health insurance marketplace notices must be given to new and current employees

By October 1, 2013, employers must give written notices regarding the new Health Insurance Marketplace (previously called the Exchange) to new and current employees. This new requirement was put in place by the Patient Protection and Affordable Care Act, which amended the Fair Labor Standards Act. To help employers comply, the Department of Labor recently released Model Notices for employers to use to satisfy this requirement.

WHO PROVIDES THE NOTICE?

Employers are required to provide the Notice whether or not they offer a health plan to their employees. The Department of Labor has published two versions of the model notice depending on whether an employer offers a health plan to employees or not. Insurance carriers and third party administrators of group health plans are NOT responsible for providing the Notice on behalf of an employer.

WHO GETS THE NOTICE?

A Notice of Coverage Options must be provided to each employee, regardless of plan enrollment status, or of part-time or full-time status. Employers, however, are not required to provide this notice to spouses or dependents who are not employees.

WHEN IS THE NOTICE GIVEN?

New Hires: Employers must provide the Notice to each new employee at the time of hiring, beginning on October 1, 2013.

Current Employees: Employers must provide the Notice to their current employees no later than October 1, 2013.

HOW IS THE NOTICE GIVEN?

The Notice must be provided in writing in a manner reasonably calculated to be understood by the average employee.

The Notice may be provided by first-class mail. It also may be provided electronically if the requirements of the Department of Labor’s electronic disclosure for safe harbor are satisfied.

WHAT MUST BE INCLUDED?

The Notice must inform employees of the existence of the new Marketplace as well as contact information and a description of the services provided by the Marketplace.

The Notice also must inform the employees that they may be eligible for a premium tax credit if the employee purchases a qualified health plan through the Marketplace. It also must include a statement informing the employee that 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.

MODEL NOTICES

The Department of Labor has provided two model notices for use to satisfy this requirement. Employers will need to complete Part B of the applicable Notice with the requested information.

One Notice applies to employers who offer a health plan to some or all employees. Here is a link to this Notice: http://www.dol.gov/ebsa/pdf/FLSAwithplans.pdf.

The other Notice applies to employers that do not offer a health plan. Here is a link to this Notice: http://www.dol.gov/ebsa/pdf/FLSAwithoutplans.pdf.

CHANGES TO COBRA MODEL ELECTION NOTICE

The Department of Labor also has revised its model COBRA notice to help make qualified beneficiaries aware of other coverage options available in the Marketplace. Here is a link to the revised COBRA model election notice: http://www.dol.gov/ebsa/cobra.html.

To use the model election notice properly, of course, the plan administrator must fill in the blanks with appropriate plan information.

For more information, visit the informative Technical Release issued by the Department of Labor: http://www.dol.gov/ebsa/pdf/tr13-02.pdf

CHUHAK & TECSON’S EMPLOYMENT LAW PRACTICE GROUP

Chuhak & Tecson’s Employment Law Practice Group provides this client alert as part of its ongoing mission to be Right There With You. Should you have any questions regarding your obligations to provide these Notices or other questions involving employment law, we encourage you to contact a member of our team. Learn more about our Employment Law Practice Group.

This Chuhak & Tecson, P.C. communication is intended only to provide information regarding developments in the law and information of general interest. It is not intended to constitute advice regarding legal problems and should not be relied upon as such.