October 1 Health Insurance Marketplace Notification Deadline
UPDATE: THIS ARTICLE WAS WRITTEN PRIOR TO THE HEALTH INSURANCE MANDATE BEING DELAYED UNTIL 2016 FOR SELECT EMPLOYERS. READ ENA’S MOST RECENT ACA ALERT HERE.
Section 1512 of the Affordable Care Act (ACA) created Section 18B of the Fair Labor Standards Act (FLSA), which requires all employers subject to the FLSA to provide employees a notice of coverage options available through the new health insurance marketplace. Let’s take a look at what that means for Wisconsin employers.
Guidance on Required Notice
October 1, 2013 is the deadline for employers to provide notices to their employees regarding the existence of health insurance marketplaces. The U.S. Department of Labor (DOL) issued Technical Release 2013-02 (TR2013-02) to assist employers with satisfying the requirement to notify employees. All employers subject to the FLSA must provide the notice; however, at this time, there is no penalty for an employer who fails to comply with this mandate. Best practices suggest compliance given the uncertainty as to how various agencies may respond to such a failure and possible employee claims for interference with rights provided by the ACA.
The FLSA generally applies to 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. If you aren’t sure whether the FLSA applies to your company, consult the DOL website at www.dol.gov/elaws/esa/flsa/scope/screen24.asp.
The notices must contain the following information:
- The employee must be informed of the existence of the marketplace (referred to in the statute as the exchange), including a description of the services provided by the marketplace and the manner in which the employee may contact the marketplace to request assistance.
- If the employer’s share of the total allowed costs of benefits provided under the plan is less than 60 percent, the employee may be eligible for a premium tax credit under Section 36B of the Internal Revenue Code if he/she purchases a qualified health plan through the marketplace.
- If the employee purchases a qualified health plan through the marketplace, he/she may lose the employer contribution to any healthcare plan offered by the company, and all or a portion of the contribution may be excludable from income for federal income tax purposes.
Employers must provide the notice to each employee regardless of whether the employee is full-time or part-time or whether he/she is enrolled or eligible to enroll in a group health plan. You aren’t required to provide separate notice to dependents or other individuals who may become eligible for coverage.
TR2013-02 includes guidance and two template marketplace notices. The DOL created one model notice for employers that don’t offer a health insurance plan to employees and one model notice for employers that offer health insurance to employees (see www.dol.gov/ebsa/healthreform/index.html). You may use one of the model notices, but you’re also allowed to create a modified version as long as it provides the required information set forth above.
Model Notice Details
The model notice for employers that don’t offer healthcare coverage includes the information described above plus an explanation of the impact employer healthcare coverage has on the employee’s eligibility for subsidies in the marketplace. The notice doesn’t require you to provide specific contact information for the marketplace but instead refers the employee to the government’s healthcare website at www.healthcare.gov. However, the notice requires you to provide company contact information, including your employer identification number (EIN). That’s the same information an employee will need to provide when he/she applies for a premium subsidy while shopping in the marketplace.
The model notice for employers that offer a health insurance plan includes the same basic information as the model notice for employers that don’t offer a plan. The notice requires you to provide contact information for obtaining more details about the company’s healthcare plan. You must state whether the health insurance plan is offered to all employees and, if not, describe the employees who are eligible for the health plan. You must also state whether you offer dependent coverage and which dependents are eligible.
The DOL has also updated its model COBRA election notice to provide information about the marketplace so qualified beneficiaries may determine if they are eligible for a subsidy to pay for coverage offered through the marketplace (see www. dol.gov/ebsa/healthreform/index.html). The notice clarifies the limit on exclusions for preexisting conditions beginning in 2014. TR2013-02 provides that use of the model COBRA election notice (completed appropriately) will be considered good-faith compliance with the COBRA election requirements. The notice does not provide a specific deadline or compliance date. However, because employers are required to issue the new marketplace notices by October 1, 2013, updating all notices at the same time is a good practice so you don’t overlook anything.
The notices must be provided to current employees no later than October 1, 2013. The deadline is intended to correspond to the open enrollment period beginning October 1 for coverage through the marketplace beginning January 1, 2014. For 2014, the DOL will consider notice to be given at the time of hiring if the notice is provided within 14 days of the employee’s start date.
The notices must be provided free of charge, in writing, and in a manner that will be understood by the average employee. The notices may be sent by first-class mail or e-mail in accordance with the DOL’s electronic disclosure safe harbor.
Although certain provisions of the ACA have been in effect since 2010, the majority of the regulations that affect employers will take effect in 2014 and 2015. If you haven’t yet consulted with an ACA expert and analyzed the impact the ACA will have on your business, now is the time to do so.
A similar article was featured in the June 2013 issue of the Wisconsin Employment Law Letter, which is edited by Axley Brynelson and published by BLR®—Business & Legal Resources. Reproduced here with the permission of BLR®—Business & Legal Resources.