By no later than October 1, 2013, most employers, regardless of size, will be required to provide each newly hired and current employee with a notice informing them of healthcare coverage options available through the Health Insurance Marketplace (the Exchange) as required under the Patient Protection and Affordable Care Act. The US Department of Labor has released two model notices (one to be used by employers who offer insurance and one to be used by employers who do not offer insurance) and well as compliance guidance. Below is a summary of the guidance with links to the model notices.
Employers must provide a notice of coverage options to each employee, regardless of plan enrollment status (if applicable) or of part-time or full-time status. Employers are not required to provide a separate notice to dependents or other individuals who are or may become eligible for coverage under the plan but who are not employees.
Form and Content of the Notice
Pursuant to the statute, the notice to inform employees of coverage options must include information regarding the existence of a new Marketplace as well as contact information and description of the services provided by a Marketplace. The notice must also inform the employee that the employee may be eligible for a premium tax credit if the employee purchases a qualified health plan through the Marketplace; and 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.
The notice also requires the employer to affirm that the health plan that it offers meets minimum actuarial value and is affordable.
Timing and Delivery of Notice
Employers are required to provide the notice to each new employee at the time of hiring beginning October 1, 2013. For 2014, the Department will consider a notice to be provided at the time of hiring if the notice is provided within 14 days of an employee’s start date.
With respect to employees who are current employees before October 1, 2013, employers are required to provide the notice not later than October 1, 2013. The notice is required to be provided automatically, free of charge.
The notice must be provided in writing in a manner calculated to be understood by the average employee. It may be provided by first-class mail. Alternatively, it may be provided electronically if the requirements of the Department of Labor’s electronic disclosure safe harbor are met.
There is one model for employers who do not offer a health plan and another model for employers who offer a health plan or some or all employees. Employers may use one of these models, as applicable, or a modified version, provided the notice meets the content requirements described above.
EANJ members that have attended the healthcare seminars are encouraged to consult seminar materials, particularly with regard to determining the plan’s minimum value and whether it is affordable.