PPACA: Employee Notification of Exchanges

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Health reform is a ticking clock and no one really knows what time it is. Translation? There is much to be done within a specific time frame, but it’s debatable if it can all get done on time. One such requirement in question includes an employer’s legal obligation to inform employees of a state’s health exchange.

PPACA mandates that employers will notify employees of coverage available in a state’s exchange. Although notification should begin effective March 1, 2013, several sources have indicated that the Department of Labor will likely move the deadline to a later date.

The Deed
Employers will have to provide current employees and new hires with written notice of:

  1. The existence of an Exchange, including a description of its services, and how an employee may contact the Exchange to request assistance;

  2. If the employer plan's share of the total allowed costs of benefits provided under the plan is less than 60 percent, that the employee may be eligible for a premium tax credit under section 36B of title 26 and a cost sharing reduction under section 18071 of title 42 if the employee purchases a qualified health plan through the Exchange; and

  3. If the employee purchases a qualified health plan through the Exchange and the employer does not offer a free choice voucher, then the employee may lose the employer contribution (if any) to any health benefits plan offered by the employer and that all or a portion of such contribution may be excludable from income for Federal income tax purposes.

Frequently Asked Questions

Which employers have to comply?
The requirement applies to all employers subject to the Fair Labor Standards Act (FLSA). The FLSA is defined as “any person acting directly or indirectly in the interest of an employer in relation to the employee.”

When do employees need to be notified?
The ACA provisions specify that current employees will need to be notified by March 1, 2013. New employees need to be notified in writing at the time of hire.

Which employees need to be notified?
At this time, it is believed that all employees will need to be notified. The FLSA defines an “employee” as an individual employed by an employer.

Is there a template or specific guidelines employers need to follow?
The Department of Labor has yet to release any specific guidance for employers. Industry sources speculate that the DOL will not hold employers to the March 1, 2013 deadline.

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Sources
 2010 US Code Title 29 - Labor Chapter 8 - Fair Labor Standards - Section 218b: Notice to Employees

Disclaimer: The information provided herein is for informational purposes only and should not be considered legal advice. Please contact a lawyer for legal guidance.