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By: David Cole
The U.S. Department of Labor recently released new guidance on the “Notice of Exchange” employer disclosure responsibility under the Affordable Care Act, along with two model notices that employers may use to meet this requirement. Under the Affordable Care Act, all employers who are subject to the Fair Labor Standards Act must give written notice to employees of the availability of insurance through state or federal health exchanges, which are scheduled to open for enrollment on October 1, 2013, for coverage to begin on January 1, 2014. In a prior post, we reported that the DOL extended the deadline for providing this notice to employees from March 1, 2013, until an unspecified time sometime in the “late summer or fall” of 2013.
Given this prior announcement, the DOL’s publication of the model notices in May is much earlier than expected. This seems to be the DOL’s response to a large number of requests from employers to provide model notices before then. Thus, the DOL says the new guidelines are only interim guidelines, but that employers may rely on them and the model notices until it issues final regulations. Under the interim guidelines, employers must provide all of their employees with the required notice by October 1, 2013, which is the date open enrollment in the exchanges is scheduled to begin. This applies regardless of full-time or part-time status, and regardless of their enrollment status under existing group plans. Thereafter, employers must provide notice to each new employee upon hire, which the guidelines define as within 14 days of an employee’s start date.
The DOL’s interim guidance provides two model notices for use by employers – one for employers that offer group health coverage, and one for employers that do not. Both versions provide the required information about the existence of exchanges and the services they provide, the availability of premium tax credits and cost-sharing reductions, and the potential for losing employer contributions to any health plan sponsored by the employer. In addition, the version for employers that offer group health coverage contains information about the employer and its group health coverage options in numbered sections that correspond to items the employee will have to complete when enrolling for coverage and/or financial aid through an exchange. Employers are not required to complete this section unless and until an employee requests the information in order to enroll through an exchange, but supplying the information up front is a good idea because it will let employees enroll through an exchange without seeking individualized help from the employer.
Employers do not have to use the model notices, and are free to instead prepare their own versions of notice, so long as it provides all of the information required by the statute. In addition, the guidance states that the notice must be provided in writing in “a manner calculated to be understood by the average employee,” a standard which presumably is met by the model notices. Employers may deliver it by first-class mail, in person at the workplace, or electronically if certain DOL safe harbor requirements are met.