The Departments of Labor and Health and Human Services and the Internal Revenue Service (collectively, the Departments) have issued another set of FAQs to address the ACA's requirements on the employer exchange notice and the prohibition of waiting periods in excess of 90 days.
Employer Exchange Notice. The Departments clarified that an insurer, a multiemployer plan or a TPA can send the employer exchange notice on behalf of the employer. Pursuant to new section 18B of the FLSA, employers must provide employees with a notice of exchange availability no later than October 1, 2013 and must provide the notice to new employees beginning on and after October 1, 2013. The FAQs provide that an employer will have satisfied its obligation to provide the notice to a specific employee if another party (i.e., the insurer, the multiemployer plan or the TPA) timely provides a complete notice. The employer still has an obligation to provide the notice to the non-enrolled employees. Employers will also likely have to provide the notice to new employees because the notice must be provided within 14 days of the new employee's date of hire and the issuer, multiemployer plan or TPA may not have knowledge of the new employee in that timeframe. Separately, the DOL has issued an FAQ confirming that there are no penalties or fines under the law for failing to provide the exchange notice, though the DOL has cautioned that failure to provide the notice could trigger an audit or other enforcement activity.
90-Day Waiting Periods. The Departments reiterated that plans and issuers may continue to rely on the proposed regulations on the 90-day waiting period requirement through 2014 and confirmed that, if the final regulations are more restrictive, plans and issuers will be given sufficient time to comply.
Additionally, the FAQs provide that eligibility conditions in a multiemployer plan operating pursuant to a collective bargaining agreement (CBA) that require employees to accumulate hours of covered employment, that may occur across multiple contributing employers, are not considered to be designed to avoid compliance with the 90-day waiting period rules. Although this is a welcome confirmation for multiemployer plans, CBAs should still be reviewed to ensure that the language fits within this exception.