The U.S. Department of Labor (DOL) has published guidance on the notice that most employers must provide to their employees by October 1, 2013, about the insurance that will be available through health care marketplaces known as “exchanges.” The guidance includes three model notices.
Under the Affordable Care Act, employers offering health coverage must notify employees about the exchanges and whether employees are eligible for tax credits if they purchase coverage from the exchanges. Employers also must warn employees that they will not receive an employer contribution toward health coverage purchased through an exchange. Whether an employee is eligible for tax credits depends on whether the employer-sponsored plan provides “minimum value.” Employers can modify the model notice form to meet their needs.
Similarly, employers who do not offer health coverage must notify employees about the exchanges and their eligibility for a tax credit for insurance purchased through an exchange.
The notice requirement applies to employers subject to the Fair Labor Standards Act. The notices must be provided to all current employees no later than October 1, 2013, as well as to new hires beginning on that date. The notices may be delivered electronically in accordance with the DOL safe harbor.
Lastly, the DOL updated its model COBRA notice to include information on the exchanges. Beneficiaries who will lose coverage in a group health plan as a result of a qualifying event—such as termination of employment, reduction in hours, or divorce—can elect COBRA continuation coverage. The COBRA notice informs qualified beneficiaries of their rights to continuation coverage and how to make an election. The updated model notice also informs beneficiaries they can alternately purchase coverage on the exchanges.
As the federal health care reform effort gained steam, Ballard Spahr attorneys established the Health Care Reform Initiative to monitor and analyze legislative developments. With federal health care reform now a reality, our attorneys are assisting health care entities and employers in understanding the relevant changes and planning for the future. They also have launched the Health Care Reform Dashboard, an online resource center for news and analysis on developments under the Affordable Care Act.
If you have questions about employer notice requirements or other elements of exchanges, contact Jean C. Hemphill at 215.864.8539 or hemphill@ballardspahr.com, or Robert S. Kaplan at 215.864.8417 or kaplanrs@ballardspahr.com.