Federal law requires employers to give their workers a Notice of Coverage Options (“Exchange Notice”) by October 1, 2013. Whether you are an employer, or a broker helping an employer, here are some answers to your questions regarding the notice requirement.
Distribute the Notice to ALL employees – full-time, part-time, seasonal, temporary, etc. – by October 1.
All employees must receive the Notice whether or not they are eligible for benefits at work. The Notice is not required for dependents, retirees, former employees or COBRA. Model notices are posted on the DOL website at http://www.dol.gov/ebsa/pdf/FLSAwithplans.pdf. Start with the model notice and then fill in the blanks and variable items as needed for each employer. There are two versions: one is for employers that offer health coverage to some or all workers (the “with plan” version); the other is for employers that do not offer any health coverage (the “without plan” version). Distribute the Notice by first-class mail to the employees’ homes. Alternatively, you may use electronic delivery (such as email) but only if the delivery method complies with the DOL safe harbor rule. Employers are required to distribute the Notice to new hires within 14 days of hire. This will be an ongoing process.
Frequently Asked Questions
What is the Notice of Coverage Options (“Exchange Notice”)?
The Affordable Care Act (ACA) – often called federal health care reform – requires employers to notify workers about the availability of the new Health Insurance Marketplaces. The Marketplace is an insurance exchange where individuals can compare individual health insurance plans offered by private insurance companies. Employers are required to inform employees about the availability of the Health Insurance Marketplace, as well as inform employees that they may be eligible for financial assistance (premium tax credit or cost-sharing reductions) if they purchase coverage through the Marketplace. If the employer’s plan would not provide minimum value, employers should inform employees that if they buy insurance through the Marketplace, they may lose their employer’s contribution (if any) to their health benefits at work.
Why is the Notice due October 1?
October 1, 2013 is the first day that the Marketplaces (insurance exchanges) will be open. The Notice contains information that may be helpful to employees considering individual policy options available at the Marketplace.
Is the Notice a one-time requirement?
No, employers must provide the Notice to all current employees by October 1, 2013. Going forward, the notice must be given to new hires within 14 days, so the Notice will become part of your standard new hire process. Employers do not need to design a notice. Fortunately, the US Department of Labor (DOL) provides model notices so each employer can use one of the model notices.
Are all Employers required to distribute the Notice?
Yes, with very few exceptions. Employers are required to provide the Notice via first-class mail to the employee’s home, or electronic delivery IF in accordance with the DOL electronic disclosure safe harbor. This generally means that all the following conditions are met: the delivery method must be designed to ensure actual receipt (such as via email directly to the employee instead of merely posting the material on the company intranet), the employee regularly accesses the electronic media as an integral part of his/her regular job duties, and the employer notifies the employee of the significance of the material and that a paper copy is available at no cost upon request.
Which Employees must receive the Notice?
All employees must receive the Notice, including full-time, part-time, temporary, seasonal, and union employees. The distribution should include all W-2 employees regardless of whether eligible or ineligible for benefits. Distribution to non-employees (dependents, retirees, former employees, COBRA) is not required.
Must the Notice be provided in languages other than English?
There is no specific requirement to provide non-English notices, although the DOL guidance refers to providing the Notice “in writing in a manner calculated to be understood by the average employee”. The DOL has made the model notices available in Spanish.
If coverage is affordable for some but not all eligible employees, should the employer prepare separate versions of the Notice?
There is no requirement to prepare and distribute separate Notices for different employee classes. Most employers will find that using one consistent Notice for all employees will help avoid the challenges of tracking who received which version.
Lastly, note that employees who want to consider individual policy options at the Marketplace, particularly those applying for financial assistance, may need the information in boxes 13-16 in the Notice. Employers should be prepared to respond promptly to an employee’s request for a personalized Notice including those items.
Hopefully this article was able to answer your questions regarding the October 1st deadline, but as always, feel free to contact us with any questions at 978-998-6896.