Unless the federal government does a dramatic about face, the public health insurance exchanges will be up and running October 1 for enrollment in 2014. Many employers are also facing an October 1 deadline that imposes a paperwork burden.

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Important Employer Deadline under
the Healthcare Law Is Almost Here

2. Unless the federal government does a dramatic about face, the public
health insurance exchanges will be up and running October 1 for
enrollment in 2014. Many employers are also facing an October 1
deadline that imposes a paperwork burden.
By that date under the Affordable Care Act, most employers are
required to provide a notice to each employee explaining their options
available under the law.
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»

3. Here is what most employers need to tell employees:
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Technically, the law does not impose any fines for failing to provide the
notices. However, the Affordable Care Act is intertwined with other laws
(this particular provision is embedded in the FLSA in a new section, 8A), so
it is considered a good idea to comply to avoid possible legal complications.
• The exchange exists, what services the exchange provides, and how
employees can contact the exchange to receive assistance.
• If your health plan covers less than 60 percent of the cost of those
benefits, employees may be eligible for a premium tax credit if they
buy coverage through the exchange.
• If the employee buys coverage through a public exchange, he or she
may forfeit employer contribution to health benefit costs. At the
same time, employer support for employees buying coverage via a
public exchange may be excludable from their income for purposes of
taxation.

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Who Must Receive the Notices?
Notices must be given to all employees, whether or not they work full
time, and regardless of whether they are currently receiving health
benefits. The October 1 deadline is to give these notices
to all employees. After October 1, the notices must be given to new
hires within two weeks of coming on board.
The notices must "be provided in
writing in a manner calculated to be
understood by the average
employee," says the Department of
Labor (DOL) in Technical Release
2013-02. They can also be provided
via e-mail, but only to employees for
whom accessing e-mail is "an "integral
part of the employee's duties" and
who can access the system easily.

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Which Employers Must Send the Notices?
The notice requirement must be met by employers that must comply
with the Fair Labor Standards Act (FLSA). In general, the FLSA applies to
employers with one or more employees who are engaged in, or produce
goods for, interstate commerce. For most firms, a test of not less than
$500,000 in annual dollar volume of business applies.
The FLSA also specifically covers the following:
hospitals; institutions primarily engaged in the
care of the sick, the aged, mentally ill, or
disabled who reside on the premises; schools
for children who are mentally or physically
disabled or gifted; preschools, elementary and
secondary schools, and institutions of higher
education; as well as federal, state and local
government agencies.

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Model Notices
The DOL has issued a pair of model notices you can use. One is for
employers which currently offer health benefits and another for
those which do not. On Part B of the forms, you will see information the
employees will need if they plan to purchase coverage on the exchange,
assuming they are eligible. The Part B information would allow
employees who apply to their state's exchange (or the federal version, if
no state-run exchange exists) to complete a required questionnaire to
determine their eligibility for the program.

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The model notice for employers that do currently offer health coverage
features a lot of slots for information about your health plan in Part B.
Since the law doesn't actually require you to provide the information,
and because some of the information may be hard to dig up,
"employers may decide to disregard some or all of Part B, especially if
the information is uncertain or likely to change," according to attorney
Ann Caresani, a partner with Porter Wright firm.
The DOL hasn't issued much guidance on some of the details requested
in Part B. Caresani therefore urges employers to be "cautious about
volunteering too much information."

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Satisfying the "Bronze Standard"
One question in Part B asks whether your organization provides health
benefits that meet the ACA's minimum value test -- in other
words, whether your plan lives up to the bronze standard. This
information is also essential for determining whether you are "playing"
or will instead need to "pay" when the delayed requirement takes
effect in 2015.
It also determines whether employees are eligible to get coverage
through the exchange. In May, the Department of Health and Human
Services issued proposed regulations (not yet finalized but best
guidance available so far) on the subject. Individual states may set some
standards of their own.

9. Here are three safe harbors:
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• A plan with a $3,500 integrated medical and drug deductible, 80
percent plan cost sharing, and a $6,000 maximum out-of-pocket limit
for employee cost-sharing;
• A plan with a $4,500 integrated medical and drug deductible, 70
percent plan cost sharing, a $6,400 maximum out-of-pocket limit, and
a $500 employer contribution to an HSA; and
• A plan with a $3,500 medical deductible, $0 drug deductible, 60
percent plan medical expense cost-sharing, 75 percent plan drug cost-
sharing, a $6,400 maximum out-of-pocket limit, and drug co-pays of
$10/$20/$50 for the first, second and third prescription drug tiers,
with 75 percent coinsurance for specialty drugs.

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Possible Employee Public Relations Opportunity
If it turns out the plan your organization is already offering exceeds the
bronze standard, consider turning it into an opportunity to help
employees appreciate the benefit they are receiving.
Seizing this employee public relations opportunity may counter any
lingering doubts or speculation by some employees. There could be
some employees who believe the fact that you are informing them
about the public exchange automatically means the deal you are
offering them is substandard, and therefore, they are eligible for tax
subsidies through the public exchange.

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