The Department of Labor (DOL) has extended the deadline for employers to provide notices of exchange coverage from March 31, 2013 to an unspecified future date. The new deadline is expected to be in the late summer or fall of 2013, to coincide with the open enrollment period for health care reform. This provides employers with additional time to prepare the notices. The DOL has also issued FAQs that provide additional detail on these notice requirements.

Notice of Exchange Coverage Generally

The Patient Protection and Affordable Care Act amended the Fair Labor Standards Act (FLSA) to require that covered employers provide each employee with a notice informing the employee of certain information related to the health care exchanges. Covered employers are all employers covered by the FLSA, which is a broad definition likely to encompass the majority of employers.

The notice will be required to:

  • inform employees of the existence of the health care exchange;
  • describe services provided by the health care exchange;
  • explain that the employee may be eligible for a premium tax credit or cost-sharing reduction if the employer's plan does not meet specified criteria;
  • notify the employee that if coverage is purchased through the health care exchange, the employee will lose any employer contribution towards the cost of health coverage provided by the employer, which would be excludable for income tax purposes, whereas exchange coverage will be paid with after-tax dollars;
  • provide contact information for assistance with the health care exchanges; and
  • explain available appeal rights.

DOL May Issue Model Language

The DOL is considering providing model language that employers may use to satisfy the exchange coverage notice requirements and permitting employers to satisfy the exchange coverage notice requirements by using the "employer coverage template" described in prior DOL guidance. The model notice and/or "employer coverage template" will be available for download on the government health care exchange website. The DOL stated that any future guidance on complying with the exchange coverage notice requirements is expected to provide flexibility and sufficient time for employers to comply.