The October 1 deadline to provide employees a notice of the availability of coverage through the Health Insurance Marketplace (also known as the "Marketplace" or "Exchange") is quickly approaching.
The Affordable Care Act (ACA) amended the Fair Labor Standards Act and requires employers to provide employees with written notice of their health care coverage options available through the Marketplace. The notice must be provided automatically, free of charge to:
Each new employee at the time of hire beginning October 1, 2013; and
Current employees no later than October 1, 2013.
The notice of coverage options must be provided to all employees, regardless of plan enrollment status or of part-time or full-time status. Notices do not have to be provided to dependents, or other individuals who are not employees who may become eligible for coverage under the plan.
In accordance with the temporary guidance issued by the US Department of Labor (DOL), the notice to inform employees of coverage options must:
Include information regarding the existence of a new Marketplace;
Explain that the employee may be eligible for a premium tax credit if he or she purchases coverage through the Marketplace; and
Inform the employee that if coverage is purchased through the Marketplace, then he or she may lose the employer contribution (if any) to any health benefit plan offered by the employer, and that all or a portion of such contribution may be excludable for federal income tax purposes.
Employers must provide the notice in writing in a manner calculated to be understood by the average employee. The notice may be delivered by hand or by first class mail. An employer is also permitted to deliver the notice electronically if it meets the requirements of the DOL's electronic disclosure safe harbor. This safe harbor generally permits electronic disclosure to employees:
Who have the ability to effectively access documents furnished in electronic form at any location where the employee is reasonably expected to perform duties; and
For whom access to the employer's electronic information system is an integral part of those duties.
There are two model notices available on the DOL's website. One for an employer who offers a health plan to some or all employees and one for an employer who does not offer a health plan to its employees.
An employer may use either one of the model notices or a modified version of a notice as long as the modified notice meets the prescribed requirements under the ACA.