With the implementation of the new health insurance exchanges under the Affordable Care Act (ACA) just months away, employers and employees are gearing up for big changes in the health insurance market. Your employees will have more options under the new law, and they probably have a lot of unanswered questions.
As an employer, you can play a crucial advisory role in helping your employees sort out their options. In fact, the new law requires you to do so.
If you’re subject to the Fair Labor Standards Act (FLSA), which most employers are, the ACA requires you to provide the following notices:
- The “Notice to Employees of Exchange Coverage Options” is required to inform employees of coverage options available through the marketplace (as required under FLSA). This notice should be supplied by the employer, in coordination with the health insurer, as it includes representations required to evaluate the employer’s plan as it compares to the health care plans in the marketplace exchange. Beginning Oct. 1, 2013, new employees must receive this notice when hired by groups of ALL sizes. The only distinction is whether the group has an employer-sponsored plan or not. There is a notice for either situation. For 2014, the DOL will consider a notice to be provided at the time of hiring if the notice is provided within 14 days of an employee's start date. Existing employees must receive notice no later than Oct. 1, 2013. A model notice (for employers sponsoring a plan) can be found at http://www.dol.gov/ebsa/pdf/FLSAwithplans.pdf, and a model notice (for employers NOT sponsoring a plan) can be found at http://www.dol.gov/ebsa/pdf/FLSAwithoutplans.pdf.
- The new “Updated Model Election Notice under COBRA” must be ready by Jan. 1, 2014. The recent guidance provided an updated model election notice for group health plans for purposes of the continuation coverage provisions under COBRA, which includes additional information regarding health coverage alternatives offered through the Marketplace. This notice is a modification of the COBRA election notice and includes language informing those who have experienced a COBRA qualifying event that in addition to plan continuation through COBRA, there are other ways to obtain coverage now available to them through the marketplace or health exchange. A sample of this notice (modelelectionnotice.doc) is also available at the Department of Labor website.
1. If you don’t have to worry about “pay or play,” the notice provisions don’t apply. WRONG! Some employers believe that if they’re below the “pay or play” threshold of 50 employees, they don’t have to provide notices. This is incorrect. The notice requirements apply to any business subject to the Fair Labor Standards Act.
2. If you don’t provide employer-sponsored benefits, the notice provisions don’t apply. WRONG AGAIN! Even if your employees are not enrolled in your insurance plan, they must be given notice.
3. Notices are not needed for part-time employees. STILL WRONG! Generally, all employees — both full- and part-time — must be provided notice.
As confusing as the new law may be for you right now, it’s probably even more confusing for your workers. So don’t look at this new reporting requirement as just another government regulation. It’s also another opportunity to be a valued resource and partner for your most vital asset – your employees.
And, of course, if you have any COBRA notice questions, our Client Services department is happy to help.
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