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The Patient Protection and Affordable Care Act, as amended ("ACA"), requires that employers provide notice to all employees about the availability of health insurance under exchanges (now termed "Health Insurance Marketplaces") and the employer's plan, as applicable. By statute, the notice was initially required by March 1, 2013. However, in January of this year, the federal Department of Labor ("DOL") posted a set of FAQS to address issues raised by stakeholders in order to help understand and benefit from the ACA and announced a delay in the March 31, 2013 notice deadline
The delay is over.
By October 1, 2013, employers are now required to issue notices to employees about exchanges, which are scheduled to come into operation January 1, 2014. The Marketplace notice must explain to employees:
- that an employee can obtain coverage through the Marketplace;
- that an employee may be eligible for a premium tax credit against the employee's income tax if an employer plan's share of the total allowed costs of benefits provided under the plan is less than 60% of the costs or if the cost of the coverage is not "affordable"; and
- if the employee does purchase coverage through the Marketplace, then the employee may lose out on the employer contribution to the cost of coverage, which may be excludable from the employee's taxable income.
The DOL has issued model notices for employers to use, telling employees about coverage available through the Marketplaces. The DOL's Technical Release 2013-02, which contains the guidance as well as a link to the model notices, can be accessed at http://www.dol.gov/ebsa/newsroom/tr13-02.html.
Which employers must provide this notice? All employers subject to the Fair Labor Standards Act ("FLSA") must provide this notice, regardless of whether the employer offers health coverage, or are subject to the "pay or play" provision of the ACA. In general, the FLSA applies to all employers. The DOL website provides a useful online tool to help employers determine whether they are subject to FLSA coverage (see here). The purpose of the notice is to tell individuals about the Marketplace, which is available to anyone. The DOL provides 2 model notices, one for employers who do offer health coverage and one for those who do not.
The Technical Release states that any new hires on or after October 1, 2013 must receive this notice. Through 2014, a notice to a new employee is considered timely so long as it is provided within 14 days of the start date. For current employees, the notice must be provided not later than October 1, 2013. As with other DOL notice requirements regarding employee benefits matters, the notice must be in writing and written "in a manner calculated to be understood by the average employee." An employer who utilizes the model notices will satisfy this content requirement. Employers may provide the notice electronically or by first-class mail. This also is consistent with existing DOL notice rules.
What is the status of the Marketplace in New Hampshire? At present, New Hampshire has received conditional approval to establish a "State Partnership Exchange" for 2014, in partnership with the federal government. According to recent state guidance, the New Hampshire Health Insurance Marketplace (a website constructed and operated by the federal government) will be open for enrollment in New Hampshire for Qualified Health Plans on October 1 in the individual and small group markets. Coverage is planned to take effect January 1, 2014. For the text of the Insurance Department Bulletin on this topic, see http://www.nh.gov/insurance/media/bulletins/2013/documents/ins_13-009-ab.pdf
The model DOL notices do not provide details of any particular Marketplace to employees. The purpose of the Notice is to alert employees to the existence of the Marketplace in a given state. In fact, the model Notice directs employees who seek further information to the federal government website http://www.healthcare.gov
Employers should expect to see continued guidance from the federal government, as well as from New Hampshire and its Insurance Department, in the coming months as the January 1, 2014 deadline fast approaches.
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