Health Insurance Exchange notice requirements delayed
Original March 1, 2013 deadline pushed back until specifics are available
The government has delayed the March 1, 2013 deadline by which employers give written notice to employees (and new hires after March 1) about the existence of a Health Insurance Exchange in their state, as well as how to access the exchange. The Department of Labor (DOL) announced that employers do not have to meet the March 1 deadline. The deadline has been delayed until an as-yet unspecified date — likely late summer or early fall, to coincide with the open enrollment period for the exchanges.1 However, some employers may find it helpful to begin the communications sooner.
What's included in the notice requirements
When the notice requirement goes into effect, all employers subject to the Fair Labor Standards Act (FLSA) must:
Additional guidance expected
- Inform employees about the public exchange in their state and list the services the exchange provides — including appeal rights and ways to contact the exchange for help
- Notify employees that they might qualify for a tax credit from the federal government to purchase health insurance if
- the employer’s plan does not meet certain coverage and affordability requirements; and
- the employee purchases a qualified health plan through a public exchange
- Caution employees that if they are offered affordable coverage at work, but instead purchase their coverage through an exchange, they may not receive any employer contribution toward their premium, nor any related tax advantage, discount or subsidies through the exchange.
The Department of Labor will provide additional guidance on the notice requirement when more specific Health Insurance Exchange information is available.
The DOL has suggested that it may provide a template with generic language regarding the exchanges, which would allow employers to satisfy the notice requirement.
However, several questions about the requirement remain:
- Will the notice be mandatory for all employees, or just those who are eligible for health insurance?
- Can the notice be given electronically, in accordance with DOL guidelines? The accepted methods of distribution are not yet known.
- Will multi-state employers be required to tailor notices for each state?
- What are the penalties for failing to comply with this requirement? As of this writing, the penalties have not been specified.
We will provide answers to these questions — and others — as more information becomes available.
Impact on employers:
Impact on brokers:
- Employers who are subject to the FLSA should anticipate an announcement regarding the new effective date of the notice requirement in order to remain compliant. If the notices mandate the distribution of state-specific information, employers will need to satisfy the requirements for each state in which they employ workers.
Impact on employees/individuals:
- Brokers should familiarize themselves with the guidance issued and be prepared to answer employer questions, keeping in mind that states are awaiting additional federal guidance.
- The notices will help employees make better-educated health insurance decisions, by providing them with important information about state insurance exchanges and available subsidies.