September 20, 2013
Employer Notice on Health Care Coverage Options Required October 1, 2013
Guidance on required employer notice on health care coverage options. Beginning Jan. 1, 2014, individuals and employees of small businesses will have access to affordable healthcare coverage through a new competitive private health insurance market called the "Health Insurance Marketplace" (the Marketplace) (also called the “Health Insurance Exchange”). Most employers must provide written notice to employees about health insurance coverage options available through the Marketplace. The United States Department of Labor has issued Technical Release No. 2013-02 providing the following guidance on the notice requirement and has issued model notices:
- Who must provide notices. Notices must be provided by any employers to whom the Fair Labor Standards Act applies. Generally, this means an employer that employs one or more employees who are engaged in, or produce goods for, interstate commerce. For most firms, this rule doesn't apply if they have less than $500,000 in annual dollar volume of business.
- To whom must notices be provided. Employers must provide a notice to each employee, regardless of plan enrollment status (if applicable), or of part-time or full-time status. Employers do not have to provide a separate notice to dependents or other individuals who are, or may become, eligible for coverage under any available plan, but who are not employees.
- Form and content of notice. The notice must be provided in writing in a manner calculated to be understood by the average employee. The notice must include information regarding the existence of a new Marketplace, as well as contact information and a description of the services provided by the Marketplace. In addition, the notice must: (1) inform the employee that the employee may be eligible for a premium tax credit if the employee purchases a qualified health plan (QHP) through the Marketplace, and (2) include a statement informing the employee that if the employee purchases a QHP, the employee may lose the employer contribution (if any) to any health benefits plan offered by the employer, and that all or a portion of such contribution may be excludable from income for federal income tax purposes. Model language for the employer notice is available on the Department of Labor’s website at www.dol.gov/ebsa/healthreform.
- Timing and delivery of notice. Employers must provide the notice to each new employee at the time of hiring beginning Oct. 1, 2013. For 2014, a notice is considered to be provided at the time of hiring if it is provided within 14 days of an employee's start date. For employees who are current employees before Oct. 1, 2013, employers must provide the notice no later than Oct 1, 2013.