Beginning in 2014, individuals and employees of small businesses will have the opportunity to purchase health insurance through a state-based Health Insurance Marketplace known as the Exchange. Open Enrollment for the Exchanges begins October 1, 2013. As discussed in previous articles, employers must provide employees information about the coverage options available through the Exchange. Yesterday, the Department of Labor issued model language to be used for the Exchange notice.
Content of Notice
The Notice must inform employees that:
1. The Exchange is available;
2. The employee may be eligible for a premium tax credit if the employer's plan share of the costs of benefits is less than 60 percent of costs; and
3. The employee may lose the employer contribution for coverage if the employee purchases coverage through the Exchange (and that employer contribution may be excludible from income for tax purposes).
Employers Subject to Notice
Employers who are subject to the Fair Labor Standards Act are subject to the Exchange Notice requirements. Employers must provide a notice of coverage options to each employee, regardless of plan enrollment or part-time/full-time status. Employers are not required to provide a separate notice to dependents or other individuals who are or may become eligible for coverage under the plan, but who are not employees.
Timing and Distribution of Notice
Beginning October 1, 2013, Employers must provide the notice to each new employee at the time of hiring. A notice is considered to be provided at the time of hiring if the notice is given within 14 days of an employee’s start date. Current employees must receive the notice before October 1, 2013. The notice has to be provided automatically, free of charge. It can be sent by first class mail, or provided electronically if the Department of Labor's electronic distribution rules are satisfied.
Model Notice
A model notice is available for both employers with and without a health plan. Click here if you have a health plan and here if you don't.
BAS can assist with distribution of the required notice. For more information, contact your account manager or email info@BASusa.com.
