The United States Department of Labor (the “DOL”) recently issued temporary guidance on the required notice to employees regarding their coverage options under the state health insurance exchanges. The DOL guidance includes two model Notices to Employees of Coverage Options for employer use.
As background, the Affordable Care Act requires an employer to provide each employee at the time of hiring (or with respect to current employees, not later than March 1, 2013) with a written notice:
- Informing the employee of the existence of the state Exchanges, including a description of the services provided by the Exchanges, and the manner in which the employee may contact the Exchanges to request assistance;
- If the employer health benefits plan’s share of the total allowed costs of benefits provided under the plan is less than 60% of such cost, that the employee may be eligible for a premium tax credit if the employee purchases a qualified health plan through an Exchange; and
- If the employee purchases a qualified health plan through an Exchange, 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.
Earlier this year, the DOL delayed the March 1, 2013 deadline until late summer or fall of 2013, to coordinate with the open enrollment period for the state Exchanges.
The recently-issued guidance sets the deadline for providing the notice to current employees as not later than October 1, 2013, and to each new hire at the time of hiring (but not later than 14 days of an employee’s start date.) The notice of coverage options must be provided to each employee, regardless of plan enrollment status or of part-time or full-time status. However, employers are not required to provide a separate notice of coverage options to dependent or other individuals (i.e., spouses) who are or may become eligible for coverage under the plan.
The DOL also revised the model COBRA election notice to make qualified beneficiaries aware of other coverage options available through the Exchanges. According to the DOL, some qualified COBRA beneficiaries may wish to consider and compare health coverage alternatives to COBRA continuation coverage that are available through the Exchanges.
The following are links to the DOL model notices: Model notice for employers who offer a health plan: http://www.dol.gov/ebsa/pdf/FLSAwithplans.pdf
Model notice for employers who do not offer a health plan: http://www.dol.gov/ebsa/pdf/FLSAwithoutplans.pdf
COBRA model election notice: http://www.dol.gov/ebsa/modelelectionnotice.doc