On May 8, 2013, the US Department of Labor released guidance and model notices to inform employees about the state-based health marketplaces (previously called “exchanges”).
Providing Notice to Employees
Employers must provide a notice of coverage options to each employee, regardless of plan enrollment status or of part-time or full-time status. 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 are not employees.
Form and Content of the Notice
The notice must include information regarding the existence of the new Marketplace as well as contact information and description of the services provided by the Marketplace. The notice must also inform employees that
- If the employer plan’s share of the total allowed costs of benefits provided under the plan is less than 60 percent of such costs, the employee may be eligible for a premium tax credit if the employee purchases a qualified health plan through the Marketplace.
- If the employee purchases a qualified health plan through the Marketplace, the employee may lose the employer contribution (if any) to any employer-sponsored health benefits plan and any tax benefit the employee could receive resulting from the employer’s contribution.
Timing and Delivery of Notice
Employers are required to provide the notice to each new employee at the time of hiring beginning October 1, 2013. For 2014, the DOL will consider a notice to be timely provided within 14 days of his or her start date.
With respect to current employees, employers must provide the notice no later than October 1, 2013.
The notice must be provided in writing in a manner calculated to be understood by the average employee. The notice may be provided by first-class mail, or in the alternative, electronically if the DOL’s requirements for electronic disclosure are met.
Model language is available at: www.dol.gov/ebsa/healthreform. There is one model for employers who do not offer a health plan and another for employers who offer a health plan to some or all employees. Employers may use the applicable one of these models, or a modified version, provided the notice meets the content requirements described in the technical release.