The Affordable Care Act requires employers to provide employees with a notice of the availability of the Health Insurance Marketplace (sometimes known as the health insurance “Exchange”) that will be available Jan. 1, 2014. The Exchange is designed to be a competitive private health insurance market for individual employees who can purchase insurance from a menu of plans and providers.
Because open enrollment begins Oct. 1, 2013, employers are required to distribute the notice by that date. There are two model notices (depending on whether or not the employer offers a health plan) which can be found on the Department of Labor website under the “Notice to Employees of Coverage Options” section.
For employers that do not offer coverage or offer coverage that does not meet an affordability test, employees may be eligible for a tax credit that lowers their costs of purchasing insurance through the Exchange. The credit applies if the employer’s health plan does not meet a minimum value standard of which the plan’s share of total benefits’ costs are no less than 60 percent of such costs, or the plan cost is more than 9.5 percent of household income for the year.
All employees, including full or part-time and those not enrolled in the employer-sponsored plan, are required to receive this notice. For newly hired employees the notice must be provided within 14 days of their start date. The notices contain a section for employees to submit information to the Exchange about the lack of employer coverage and the affordability. This information will be used to trigger penalties to employers that will be required under the employer mandate, now delayed until 2015.
Employers subject to this requirement include those who are subject to the Fair Labor Standards Act. In general, this applies to employers with one or more employees who are engaged in interstate commerce.
Further details, including Technical Release 2013-2, can be found at www.dol.gov.
Although temporary, this guidance should be relied upon until further notice. Contact your SS&G professional should you require further information.