The Affordable Care Act (ACA) created a new requirement for employers to provide employees with a written Notice of Exchange/Marketplace.
Which Employers Must Provide the Notice:
All employers subject to the Fair Labor Standards Act (FLSA), regardless of whether or not they provide coverage, have a legal obligation to provide the notice to their employees. If you are unsure if you are subject to the FLSA, you can get assistance in making that determination here:Â http://www.dol.gov/elaws/esa/flsa/scope/screen24.asp.
Employers subject to the FLSA are strongly encouraged to read through the Department of Laborâ€™s Technical Release 2013-02 for more information on the requirement to provide the Notice of Exchange: http://www.dol.gov/ebsa/newsroom/tr13-02.html.
For all current employees as of September 30, 2013, the notice must be provided NO later than October 1, 2013. For new employees hire on or after October 1, 2013, it must be provided within 14 days of the date of hire.
Who must be provided with the Notice:
All employees must be provided the notice, regardless of their eligibility or enrollment status. However, it does not need to be sent to dependents or to former employees (Cobra participants).
Content of Notice:
The notice must provide employees with the following information:
- Advise the employee of the existence of the Exchange (also called Marketplace); include a description of the services provided by the Exchange, and how to contact the Exchange or request assistance.
- Advise the employee they may be eligible for a premium tax credit or cost-sharing reduction through the Exchange (if the employer does not coverage at least 60% of the total cost of the benefits or the employee premium is more than 9.5% of their household income).
- Advise the employee of the consequence of enrolling in the Exchange in lieu of employer-sponsored health coverage (possible loss of employer contributions and tax savings towards the cost of health coverage).
The department of Labor (DOL) has created interactive model notice that employers may use:
- Employers that provide health coverage:Â http://www.dol.gov/ebsa/pdf/FLSAwithplans.pdf
- Employers that donâ€™t provide health coverage: http://www.dol.gov/ebsa/pdf/FLSAwithoutplans.pdf
The DOL model notices include more information that is required by the Statute. Therefore, employers may make changes to the model notice or create their own notice, as long as the notice meets the necessary content requirements stated above. Employers should complete page 1 and 2 of the notice, but page 3 is optional.
The model notice includes a field on page 2 where employers indicate whether the coverage meets the minimum value standard. It has been determined by the carrier that the medical plan you currently offer your employee meets the minimum value standard.
You must update the notice at your renewal or if any information you provide in the notice changes.
The notice can be provided to employees via first-class mail or electronically (as long as the DOLâ€™s electronic disclosure sate harbor requirements are met). A summary of the electronic disclosure rules can be found here: http://benefitslink.com/articles/washbull020415.html#.UdNBH53n-73.
Note: this notification is only a general description of the Notice of Exchange requirement under the Affordable Care Act. It is neither an exhaustive nor comprehensive discussion of all the Notice of Exchange requirements. Please consult your legal counsel concerning the application of the Notice of Exchange requirements of your plan.