News flash may 9, 2013 – DOL Issues Model Health Insurance Exchange Notice
News Flash: May 9, 2013 – DOL Issues Model Health Insurance Exchange NoticeMany employers have been eagerly awaiting the release of guidance explaining their obligations tonotify employees that health coverage and, possibly, premium assistance may be available througha health insurance exchange. Late yesterday, the DOL issued temporary guidance regarding thenotice requirement and provided two separate model notices: one for employers that offer healthcoverage to some or all of their employees and a second for employers who do not offer a healthplan.BackgroundUnder the health care reform law, employers that are subject to the FLSA must notify eachemployee in writing about health insurance exchanges and how to request assistance. The noticemust also describe the possible availability of a premium tax credit and outline certainconsequences of purchasing coverage through an exchange. The notice requirement was originallyscheduled to take effect on March 1, 2013, but the requirement was delayed per an announcementin late January.Highlights of the Temporary GuidanceThe National Legal & Research Group is studying the new guidance and model notices and willprovide detailed information in a future publication. On a quick reading of the materials, we notedthe following points:• For then-current employees, the exchange notice must be provided not later than October 1,2013.• Employers must provide the exchange notice to each newly hired employee beginningOctober 1, 2013.• For 2014, the notice is timely if provided to a new hire within 14 days of the employee’sstart date.• Employers must provide the notice to each employee, regardless of plan enrollment status(if applicable) or of part-time or full-time status.• Employers are not required to provide a separate notice to dependents or other individualswho are or may become eligible for coverage under the plan but who are not employees.• The notice may be provided by first-class mail or may be provided electronically, if theelectronic delivery satisfies the DOL’s safe harbor rules for electronic delivery of summaryplan descriptions.• The temporary guidance notes that “an employer may send a copy of the same notice toeach affected employee,” implying that the employer need not provide a customized noticeto each employee.
Bonus COBRA NoticeThe temporary guidance also provides an updated model COBRA election notice that includesadditional information regarding health coverage alternatives offered through the health insuranceexchanges.The information in this publication is not intended as legal or tax advice and has been preparedsolely for informational purposes. You may wish to consult your attorney or tax adviserregarding issues raised in this publication.