Employee Benefits Compliance, Employer Mandate, Exchanges / Marketplaces / Subsidies, Notices & Disclosures (Sample forms)

ALERT! Employers must send Exchange Notice to ALL Employees by October 1

Just a reminder that ALL employers who are subject to the Fair Labor Standards Act must send an Exchange Notice to ALL employees, on or before October 1, 2013, informing them of their options under the new Health Insurance Marketplaces (Exchanges) that will open January 1, 2014.

The Notice requirement applies to all size employers, whether or not they offer health coverage.  Employers must send the Notice to all full-time and part-time employees, whether or not they are benefit-eligible.  The Notice must be provided automatically, free of charge.  It can be provided by first-class mail, or it may be provided electronically if the requirements of the Department of Labor’s electronic disclosure safe harbor are met (these are at 29 CFR 2520.104b-1(c)).  It can probably also be hand-delivered.  The guidance does not prohibit or address hand-delivery, so you will probably want to get each employee to sign or initial that they received the Notice if you do hand-deliver it.

The good news is that the Department of Labor issued Model Notices (called the Notice of Coverage Options), and there is one Notice for employers who OFFER a health plan to some or all employees, and a separate Notice for employers who do NOT offer a health plan to any employees. (See link below to DOL website.)

If you are a Leavitt client, your Leavitt advisor can help you complete the employer information on page 2 of the Notice, AND Leavitt has written a sample cover letter you can use when you send the Exchange Notice to employees.  This cover letter is not required, but it may reduce the number of employees who call Human Resource or Benefits when you send out the Exchange Notice.  We also have it available in Spanish.

Additionally, for employees who are hired after October 1, 2013, employers must provide the Exchange Notice at time of hire.  For 2014, an employer will be deemed to be in compliance if the Notice is provided within 14 days of an employee’s start date.

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 (e.g., COBRA participants).

HOWEVER, Leavitt recommends that employers provide the Exchange Notice to current COBRA qualified beneficiaries (QBs), and also in the future provide it along with the COBRA Notice to newly-eligible COBRA QBs.  If you can get COBRA QBs to enroll in the Exchange instead of in COBRA under your group plan, why wouldn’t you?  It’s likely to be in the QBs’ best interest also, because it’s likely to be less costly than COBRA coverage, especially if the individual or family qualifies for a subsidy in the Exchange.

Also, the Notice requirement at this time is a one-time Notice requirement; not an annual Notice requirement.  But why would an employer NOT want to include it with annual open enrollment notices?

For additional information, see: