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By: David Cole
The Affordable Care Act requires employers to provide written notice to employees of the availability of insurance through state or federal health exchanges, which are scheduled to begin operation on January 1, 2014. The written notice must inform employees about the following:
(1) the existence of an Exchange in their state, including a description of Exchange’s services, and how the employee may contact the Exchange for assistance;
(2) the employee may be eligible for a premium tax credit or cost sharing reduction for buying qualified insurance through the Exchange if the insurance plan offered by the employer does not pay at least 60 percent of the total allowed costs of benefits; and
(3) if the employee buys qualified insurance through the Exchange, he may lose the employer’s contribution (if any) to any health benefits plans offered by the employer, which if received, may be tax deductible.
The statute requires that this notice be provided to all new employees at the time of their hire, and to existing employees by no later than March 1, 2013. With this deadline approaching quickly and no regulations or other guidance provided yet (such as a model notice), the Department of Labor (“DOL”) has officially announced an indefinite extension of the deadline. The DOL did not announce a new deadline, but only stated that it “expects that the timing for distribution of notices will be the late summer or fall of 2013, which will coordinate with the open enrollment period for Exchanges.” In addition, the DOL confirmed that it is considering providing model, generic language that employers could use to satisfy the notice requirement.
The complete text of the DOL’s announcement is available here. Between now and this summer, the DOL is expected to issue regulations providing further guidance on the notice requirement and other aspects of the law, including the automatic enrollment requirement applicable to large employers with 200 or more employees. In the meantime, employers can breath a little easier knowing that they do not have to scramble to provide notice to their employees by March 1st.