Earlier this month the U.S. Department of Labor (“DOL”) released Technical Release 2013-02 which provides guidance on the Affordable Care Act’s (“ACA”) requirement that employers provide all employees with notice of health insurance coverage options available through health insurance exchanges (“Exchange”). All employers subject to the Fair Labor Standards Act must provide notice of health care coverage options to all employees hired before October 1, 2013 regardless of the employee’s plan enrollment status or full- or part-time employment status. Employees hired on or after October 1, 2013 must be provided coverage notice within 14 days of the employee’s start date. Separate notices to dependents are not required.
These final DOL guidelines provide that coverage notices must include:
Information about the existence of the Exchange, a description of the services provided by the Exchange, and how to contact the Exchange;
Notice that an employee can obtain a premium income tax credit for Exchange coverage if the cost to the employee of the employer’s coverage exceeds 9.5 percent of the employee’s yearly household income and/or the employer’s plan pays less than 60 percent of the total cost of coverage.
A statement that if an employee obtains coverage through the Exchange, the employee may lose the employer contribution toward the cost of coverage and that all or a portion of the employer contribution may be excludable from the employee’s income for Federal income tax purposes.
The final DOL guidelines also provide three model notices for employers: (1) a model notice for employers that offer coverage; (2) a model notice for employers that do not offer coverage; and (3) a model COBRA election notice explaining the availability of Exchange coverage options.