Exchange Notice Requirement Under ACA

FLSA section 18B, added to the labor statute by the Patient Protection and Affordable Care Act (PPACA), requires employers that are subject to the FLSA (most employers) to provide to each of their employees, and to all new employees at the time of hiring, a written notice.  The notice is to remind employees of the availability of the health insurance exchange.  

The notice must be provided to each employee, regardless of plan-enrollment status or part-time or full-time status. Employers are not required to provide a separate notice to dependents or retirees, but an employer's obligation to provide the notice may extend to its independent contractors and leased workers, depending on the nature of their relationship with the employer as determined under the FLSA's "economic reality" test.  Below is a link for a Model Notice that can be used to satisfy the requirement.

http://www.dol.gov/ebsa/pdf/FLSAwithplans.pdf

NEVERMIND, WE AREN'T GOING TO FORCE YOU TO NOTIFY YOUR EMPLOYEES OF THE EXCHANGES

The U.S. Department of Labor, after stating fines of about $100 per day for noncompliance, is now telling employers that they will not be fined if they fail to notify their workers of their health insurance exchanges by October 1, 2013.  What’s interesting is that they wait nearly two weeks prior to the “drop dead” date to do this.  Most employers have probably complied with the requirement already.

The Department of Labor announced on September 11, 2013 through a question and answer format specifically addressing the fine:

Q: Can an employer be fined for failing to provide employees with notice about the Affordable Care Act's new Health Insurance Marketplace?

A: No. If your company is covered by the Fair Labor Standards Act, it should provide a written notice to its employees about the Health Insurance Marketplace by October 1, 2013, but there is no fine or penalty under the law for failing to provide the notice.

Employers are told that they should still provide the information to their employees, seemingly as a recommendation rather than as a requirement.

NOTIFICATION OF THE EXISTENCE OF HEALTH EXCHANGE-URGENT

Essentially all employers must notify all of their employees, regardless of those on a medical plan or not, of the existence of the Health Exchanges.  The Model Notice of Health Exchange is the Notification issued by the Department of Labor (or one that contains essentially the same information) that MUST be sent to ALL employees by 10-1-2013. There are three pages to the notification.  Page 2 needs to be completed by you prior to sending to your employees. The third page is optional.  All newly hired employees must be given the notification within 14 days of Hire.

Below please find the distribution and delivery requirements. 

Distribution Requirements

Employers

Any employer who is subject to the Fair Labor Standards ACT of 1938 is required to distribute the Exchange Notice to its employees. Employers who do not currently offer health care coverage to their employees and/or are not subject to the Employer Mandate under the ACA are not exempt from this notification requirement.

Employees

ALL employees must be provided with an Exchange Notice, including employees who are not eligible to enroll in employer-sponsored benefits. A few exceptions do apply. A notice does not need to be issued to:

• Spouses and dependent children covered under an employer’s plan,
• COBRA participants, and
• Retirees (even if they are enrolled in an employer-sponsored health plan).

Delivery

When it comes to getting the Exchange Notice into the hands of employees, the updated guidance provides employers with two options: 1) First Class Mail and 2) Electronic Distribution. You may choose one option for all employees or a combination of both (depending on your employee population). Please note that electronic distribution is only permissible if the following DOL regulations are satisfied:

• Access to the electronic delivery system is an integral part of the employees’ work duties.
• A statement regarding the importance of the Exchange Notice is provided.
• A free paper copy is made available upon request.

     

YOU NEED TO TELL YOUR EMPLOYEES ABOUT THE EXCHANGES, MARCH 2013

According to the Affordable Care Act (Health Reform), by March 2013 all employers must notify their employees of the existence of the Maryland Health Benefits Exchange.  In addition they will need to provide:

1. Written notice informing employees about the state’s Exchange, including a description of how the employee may contact the Exchange for assistance.
2. Notification to employees if the plan offered by the employer is inadequate, meaning it does not meet the actuarial value of 60 percent. The employer must let employees know that they may be eligible for a premium tax credit and a cost-sharing reduction if they purchase a health plan through the Exchange.
3. Employers must notify employees that if they purchase a health plan through the Exchange, the employee may lose the employer’s contribution to health benefits offered by the employer.

The Maryland Health Benefit Exchange will begin enrollments into their plans October 2013 for a January 1, 2014 effective date.  Brooks Benefit Services will be forwarding verbiage for this notification to all of our clients.  In addition we will be able to assist any employees with determining whether the exchange plans may or may not be a good fit for them.  It is important to remember that the exchanges are available to all employees whether they are full-time or part-time.  

The Maryland Health Exchange is going to be made up of several plans: Bronze, Silver, Gold, Platinum and a Catastrophic plan for younger people.  These plans will be underwritten by current carriers and will basically compete with themselves.  Since the coverage through the exchange is guaranteed issue, many believe most of our sickest and oldest individuals will jump or be pushed into these plans.  Since the cost of these plans is directly relative to the individuals income, it could make more sense to go with an exchange plan than one through an employer and visa-versa.  Depending upon the size of the employer (50+ Full-Time Employees), if the employee goes to the exchange,  your plan is deemed to either be "un-affordable" or isn't "minimal essential coverage", you will be fined.....heavily.

If any of this is new to you or needs further conversation, please do not hesitate to contact our office at 410-239-5009.