Notice of Affordable Care Act Exchanges Due By October 1, 2013

The U.S. Department of Labor (“DOL”) reminds employers that they must notify their employees by October 1, 2013, of the new health care exchange coverage option to be provided under the Patient Protection and Affordable Care Act of 2010.

In general, covered employers are those that employ one or more employees, who are engaged in interstate commerce, and who have $500,000 in annual dollar volume of business. Certain other entities may also be subject to the notice requirement.

The notice must be given to all full- or part-time employees, regardless of whether they are currently enrolled in a health plan. All employees must receive the notice by October 1, 2013, and those hired on that date or thereafter must receive it within 14 days of their start date. Employers have no obligation to provide the notice to anyone other than their employees.

The notice must contain a description of the health care exchange (or “Marketplace”), the services it provides, and contact information where the employee may obtain additional assistance. Additionally, it must notify the employee that he or she may be eligible for 
a premium tax credit if the employer’s plan does not meet certain requirements and the employee has to purchase a qualified health plan through the Marketplace. Finally, it must notify the employee that if he or she does purchase a qualified health plan through the Marketplace, he or she may lose any employer contribution to any health benefit plan offered by the employer.

The notice must be written in a manner calculated to be understood by the average employee.  It must be transmitted either by first-class mail or electronic means. If the notice is sent electronically, the DOL’s electronic disclosure safe harbor rules must be complied with.

The DOL provides two model notices on its website:  www.dol.gov/ebsa/healthreform. One model is for those employers who do not offer a health plan to their employees and the other is for those employers who do offer a health plan to either some or all of their employees. For the latter, the applicable form allows the employer to supply certain information needed by employees to apply for insurance in the Marketplace.