The Patient Protection and Affordable Care Act (“Affordable Care Act”) included direction and authorization for the creation of state-based health insurance exchanges. The exchanges are intended to offer individuals and small employers a source of “one-stop shopping” for affordable health insurance coverage through a private “Health Insurance Marketplace.” Open enrollment for health insurance coverage through the exchanges begins October 1, 2013 for coverage that may be effective as early as January 1, 2014.
To ensure that employees are aware of the exchanges, the Affordable Care Act requires virtually all employers (including employers that are not subject to the employer mandate of the Affordable Care Act) to provide a notice to employees that health insurance coverage may be available through an exchange. A notice must be provided to each employee, regardless of plan enrollment status (if applicable) or of part-time or full-time status. Employers are not required to provide notices to individuals who are not employees, including dependents, former employees and retirees.
Notices must be provided to current employees by October 1, 2013. Notices must be provided to new employees on their date of hire. (For 2014, a notice will be deemed to have been provided at the time of hire if the notice is provided within 14 days of an employee’s first date of employment.)
Notices may be provided by first-class (regular) mail. Alternatively, for employees who provide affirmative consent or for whom access to the employer’s information system is an integral part of their job, notices can be provided electronically.
Earlier this month, the United States Department of Labor (“DOL”) published model language that employers may use to create the required notices. One set of model language is designed for employers that do not offer any health insurance coverage to any employees (see http://www.dol.gov/ebsa/pdf/FLSAwithoutplans.pdf). Another set of model language is designed for employers that offer or provide health insurance to at least some employees (see http://www.dol.gov/ebsa/pdf/FLSAwithplans.pdf). For employers with plans, the notice may (but is not required to) contain employee-specific information about his/her coverage.
The DOL also issued a revised model COBRA notice, which now includes language about the health insurance exchanges. The revised model COBRA notice can be found on the DOL’s website at http://www.dol.gov/ebsa/healthreform/.
If you have any questions about this Memorandum or about the DOL’s model language, please contact Steve Daley in our Syracuse office ((315) 218-8237; sdaley@bsk.com) or any of the other members of our Employee Benefits and Executive Compensation Practice Group listed below.