By now most employers should know that effective October 1, 2013, all employers must provide their employees with a notice of the availability of insurance coverage.
If you’re still a little behind, we’ve put together a summary of the changes and the requirements including links to sample model notices.
The Affordable Care Act:
The Patient Protection and Affordable Care Act (Affordable Care Act) amends the Fair Labor Standards (FLSA) and provides that the employer must provide a written notice to each employee:
- Informing the employee of the existence of coverage through public health insurance exchanges (Marketplace Exchange);
- Explaining how the employee may be eligible for a premium tax credit or a cost sharing reduction if the employer’s plan does not meet certain requirements;
- Informing employees that if they purchase a health plan through the Exchange, they may lose their employer contribution to any health benefit plans offered by the employer and that all or a portion of the contribution may be excludable for federal income tax purposes.
Employers Subject to Notice Requirement:
Generally the Act requires employers of more than one employee who have a gross income of more than $500,000 to provide notice of coverage options.
Employees who Must Receive Notice:
Notice must be given to each employee, regardless of plan enrollment status or of part or full time status. Employers are not required to send a separate notice to dependents or individuals who are or may become eligible for coverage under the plan but who are not employees.
Notice Must Given by October 1, 2013:
Notice must be given to all existing employees on or before October 1, 2013. Employers must give notice to all new hires after October 1, 2013 within 14 days of their start date.
Notice Must be Given by First Class Mail:
Notice must be sent by first class mail or electronically according to the requirements of the Department of Labor.
To satisfy the content requirements the Department of Labor has provided model notices which can be found at www.dol.gov/ebsa/healthreform There is one model for employers who do not offer a health plan and another model for employers who do offer a health plan.
Model COBRA Election Notice:
In general, under COBRA a “qualified individual” is one who is covered by a group plan and may be able to elect COBRA continuation coverage upon a “qualifying event” such as a termination or reduction of hours.
There is a model notice on the Department’s website at www.dol.gov/ebsa/cobra.html. The qualified individual must be provided an election notice within 14 days of a qualifying event. COBRA beneficiaries may want to consider alternatives to COBRA continuation coverage that are available through the Marketplace. Qualified individuals may also be eligible for a premium tax credit.
The Affordable Care Act is more inclusive than this summary. Specific details and guidance can be found through the United States Department of Labor’s website at: http://www.dol.gov/ebsa/healthreform/index.html.