By Dean Spina
On October 1, 2013, a Health Insurance Exchange ("Exchange") is to be operational in each state. The Exchange is where individuals and small employers may obtain health insurance from participating insurers.
The Affordable Care Act added Section 18B to the Fair Labor Standards Act. Section 18B, 29 USC § 218b, provides that Employers subject to FLSA must provide employees with written Notice regarding the Exchange. Originally this Notice was required to be given by March 1, 2013. However, delays in issuing guidance on the Notice resulted in delaying the obligation to give the Notice until October 1, 2013.
- The Notice is to include the existence of the Exchange, contact information for the Exchange and services provided by the Exchange.
- The Notice is to further inform each employee that he/she may be eligible for a premium tax credit if a qualified health plan (QHP) is purchased through the Exchange.
- Finally, the Notice is to include a statement informing the employee purchasing a QHP through Exchange that the employee may lose the employer contribution (if any) towards purchase of health insurance and that such employer contribution may be excludable from income for federal income tax purposes
The Department of Labor has released interim guidance on the giving of the Notice. Technical Release 2013-02. The minimal guidance confirms that Notice is to be provided in writing and may be given by first-class mail or, within certain stringent requirements (see 29 CFR § 2520.104b-1(c)),electronically.
DOL provided two model forms of the employee Notice. One is to be used by Employers that provide health coverage and the other by Employers that do not provide health coverage.
The model forms of Notice provide more information to employees than is required by the statute. Giving some of the additional information included in the model Notice may save time by reducing the number of questions that employees ask at a later time.
An optional page of the model Notice for Employers with health plans requires the content of the Notice to be individualized for certain employees by inserting the date an employee not covered by a plan will be eligible for coverage under the Employer's plan and certain premium information.
After notifying all current employees by October 1, 2013, an Employer subject to FLSA is to give the Notice at the time of hiring new employees (but in 2014, the Notice can be given within 14 days of an employee's start date).
The Technical Release guidance and the model forms of Notice can be found at http://www.dol.gov/ebsa/healthreform/index.html
The Notice is to be given to all employees in writing. No Notice is required for dependents, former employees, or individuals eligible for COBRA.
Employers may modify the model forms of Notice provided the required information is included.
The model forms of Notice refer to the Exchange as the "Marketplace." The statutory term remains Exchange. The agency rebranding of the Exchange as a Marketplace appears in the online resources of the federal government, including, www.healthcare.gov where information on the "Marketplace" is found.
Hope is fading that DOL will issue additional guidance on giving the Notice, or even revised model Notices, prior to the October 1, 2013, deadline for giving the Notice.
On a related note, the DOL has revised the model COBRA Notice to reflect information on the existence of the Exchange [Marketplace]. Employers should prepare to use the revised COBRA Notice, available at http://www.dol.gov/ebsa/healthreform/index.html
If you have any questions regarding the Exchange [Marketplace] Notice to be given to employees or the COBRA Notice, please contact Dean Spina.