The Affordable Care Act (ACA) requires that employers, which are subject to the Fair Labor Standards Act (FLSA), provide information to employees about the availability of individual health insurance plan options through the exchange portal specific to their state(s). Current employees must receive this information by October 1, 2013, and employees hired after October 1, 2013 must receive the information within 14 days of the date of hire. These notices must be delivered by first-class mail, or electronically (if the delivery meets the United States Department of Labor’s (DOL) electronic delivery standards).
These notices inform existing and new employees of the following:
-The existence of the exchange portal within their state(s), a description of the available services, and how to access it
-That if the employer does not provide minimum essential coverage, the employee may be eligible for a premium tax credit and/or cost-sharing subsidy
-That if the employee purchases a Qualified Health Plan (QHP) from the exchange portal, the employee may lose any employer contribution to any health plan offered by the employer and that all or a portion of the contribution may be excluded from income for federal income tax purposes
The online exchange portal(s) which employers need to reference in the modal notices will vary depending on the state of your business domicile, as well as where your employees reside. For example, New York, Connecticut, and California individuals will have their own exchange portals, while individuals in states that have not setup exchanges (e.g. New Jersey) will access the Federal Health Insurance Marketplace for coverage options. The US Department of Labor provides employer model notices regarding exchange plan options, and they are available in both English and Spanish.
Employers with 20 or more employees are usually required to offer COBRA continuation coverage and must provide qualified beneficiaries with an election notice that describes their rights to continuation coverage and how to make an election. The COBRA election notice must be provided to the qualified beneficiaries within 14 days after the plan administrator receives the notice of a qualifying event.
The notice informs the employee that coverage purchased through the Health Insurance Marketplace is an alternative to COBRA and notes that the qualified beneficiary may be eligible for a premium tax credit. The US Department of Labor provides employer model COBRA notices as well.
For more information, contact your insurance broker.
*Disclaimer* This content is provided solely for informational purposes. It is not intended as, and does not constitute, legal or compliance advice. The information herein should not be relied upon or used as a substitute for consultation with legal, accounting, tax, and/or other professional advisors.