Employee Health Insurance Marketplace Notices Due October 1 – Here’s What to Do

“[The Patient Protection and Affordable Care Act] requires employers to provide notice to employees regarding the existence of the health insurance exchange, the availability of coverage and premium assistance, and information regarding the potential forfeiture of employer contributions toward employer-offered health coverage, if an employee purchases coverage through the health insurance exchange.” (Phillips Lytle)

Earlier this month, the Department of Labor issued guidance on the health insurance exchange notice requirement of the Affordable Care Act. The requirement, which becomes effective on October 1, 2013, applies to all employers subject to the Fair Labor Standards Act (FLSA). According to Michelle Capezza and Gretchen Harders at law firm Epstein Becker & Green, that includes:

“… employers that employ one or more employees and are engaged in, or produce goods for, interstate commerce. The FLSA also covers, among other things, hospitals; schools; institutions of higher education; and federal, state, and local government agencies.”

Key takeaways?

1. Notify every employee:

“Employers subject to the FLSA must provide an Exchange Notice to each employee, regardless of plan enrollment status or of part-time or full-time status. Employers are not required to provide a separate notice to dependents or other individuals who are or may become eligible for coverage under the plan but who are not employees.” (FordHarrison)

2. Put it in writing:

“The notice must be provided in writing in a manner calculated to be understood by the average employee. It may be provided by first class mail or electronically if the requirements of the DOL’s electronic disclosure safe harbor are met – that safe harbor generally requires an employee to access a computer as part of the employee’s job duties.” (Leonard, Street and Deinard)

3. Make sure your systems can handle distribution:

“Administrative systems should be examined to ensure that they are capable of fulfilling the distribution requirement to current employees and new hires who are not eligible for benefits. In addition, employers seeking to fulfill the distribution requirement via electronic delivery should consider whether employees who are not eligible for benefits, and who are entitled to receive the Marketplace Notice, have regular access to a computer as an integral part of their job duties, and whether the other requirements of the DOL’s electronic disclosure safe harbor are satisfied, so that electronic distribution is permissible.” (K&L Gates)

4. Use model notices provided by the DOL:

“The DOL has issued two different model notices, one that may be used by employers who offer health coverage to employees and the other that may be used for those who do not offer coverage. Though the model notices do not contain the level of specificity that Section 18B appears to require, the DOL has indicated that these notices may be used until further guidance and/or regulations are issued.” (Best Best & Krieger)

5. Update your COBRA notices, too:

“The Department of Labor also issued an updated model notice that can be used to inform plan participants of their COBRA health care continuation coverage rights. Although the changes include removal of certain language regarding pre-existing conditions which is becoming obsolete, the changes to the model notice seem intended to alert an individual receiving the notice that in addition to health care continuation coverage under COBRA, the individual may also have health care coverage opportunities through the Health Insurance Marketplace.” (Pillsbury)

The updates:

Find related updates on Health Insurance Exchanges at JD Supra Law News>>