As reported in our January 31, 2013 Navigating Health Care Reform Alert, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act (collectively, the “Affordable Care Act”) requires most employers to provide all new hires and current employees with a written notice about the Health Benefit Exchanges and the consequences of purchasing coverage through an Exchange rather than employer-sponsored coverage (the “Exchange Notice”). The notice requirement was originally set to take effect on March 1, 2013, but on January 24, 2013, the Department of Labor (“DOL”) issued guidance indicating that the notice requirement would not take effect until the late summer or fall of 2013.
On May 8, 2013, the DOL issued temporary guidance in the form of Technical Release No. 2013-02 (http://www.dol.gov/ebsa/newsroom/tr13-02.html). The Technical Release provides guidance on:
which employers are subject to the new notice requirement (most are, even if they do not offer a health plan);
which employees must receive the notice;
the form and content of the notice; and
the timing and delivery of the notice.
Timing of Exchange Notice
The Technical Release indicates that employers are required to provide the Exchange Notice to current employees on or before October 1, 2013, and, beginning October 1, 2013, to each new employee at the time of hiring. For 2014, the DOL 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.
To satisfy the content requirements, the DOL has issued two model Exchange Notices. Employers may use one of these models, as applicable, or a modified version, provided the notice meets the content requirements described in Technical Release 2013-02.
The model Exchange Notice for employers who offer a health plan is available on the DOL’s website (http://www.dol.gov/ebsa/pdf/FLSAwithplans.pdf). The model Exchange Notice for employers who do not offer a health plan is available on the DOL’s website (http://www.dol.gov/ebsa/pdf/FLSAwithoutplans.pdf). Both model notices are available in Spanish.
Changes to COBRA Election Notice
The Technical Release points out that some COBRA qualified beneficiaries may want to consider and compare COBRA continuation coverage to health coverage alternatives that are available through the Health Benefit Exchanges (the “Marketplace”). The Release also points out that some COBRA qualified beneficiaries may be eligible for a premium tax credit (a tax credit to help pay for some or all of the cost of coverage in plans offered through the Marketplace). As a result, the DOL has updated the COBRA model election notice that plans may use to satisfy the requirement to provide the election notice under COBRA. The notice has been revised to help make qualified beneficiaries aware of other coverage options available in the Marketplace.
The model election notice is available in modifiable, electronic form on the DOL’s website (www.dol.gov/ebsa/cobra.html). A clean copy is available, as is a redline from the prior model notice to help employers and plan administrators identify the changes.
These are just two of the many health care reform changes that take effect this year. Employers would be wise to start preparing the Exchange Notice and updating their COBRA election notices now, in advance of the October 1, 2013 deadline.