HIGHLIGHTS OF THE EXCHANGE NOTICE REQUIREMENT
The Department of Labor, since originally requiring employers to provide employees with written notice of availability of the Exchanges earlier this year, extended the deadline to October 1, 2013. Additionally, they have provided more guidance to assist employers with complying with this requirement.
WHO MUST PROVIDE THE NOTICE?
All employers that are subject to FLSA:
- Generally, the FLSA applies to employers who are engaged in interstate commerce and have gross annual sales of $500,000 or more
- “Engage in interstate commerce” is any regular contact with interstate, no matter how small. Activity must solely be local activity to avoid “engaging in interstate commerce.”
- DOL provided tool to determine FLSA applicability:
- Hospitals, non-acute care and residential facilities, schools and institutions of higher learning
- Federal, state and local governments
- Size does not matter, i.e., regardless of whether an applicable large employer or not, the Notice must be provided if the employer is in one of the above categories
WHO MUST RECEIVE THE NOTICE?
- ALL employees
- Full-time and part-time employees
- Employees covered by employer health plan/employees not covered by employer health plan
- No separate Notice required to dependents and spouses
- Not required to provide Notice to retirees
- Not required to provide to COBRA participants
WHAT INFORMATION MUST BE INCLUDED IN THE NOTICE?
Employees must be:
- Informed of the existence of the Exchanges
- Given a description of the services provided by the Exchange
- Told how to contact the Exchange
- Informed whether employees may be eligible for a subsidy if they purchase insurance through the Exchange
- Informed they may lose employer contributions if they purchase insurance through the Exchange
- Told employer contributions to the employer health plan are excludable for federal income tax purposes
We advise you use the Model Notices provided by the DOL. Each Model Notice has a Part A and a Part B:
- Part A – general Exchange, tax and economic information
- Part B – employer specific information
WHEN MUST THE NOTICE BE PROVIDED?
- Current employees - no later than October 1, 2013
- New hires – within 14 days of date of hire
- One-time Notice
DELIVERY OF NOTICE?
- First class mail
- Electronically if the requirements of DOL’s electronic safe harbor are met
- The Notice may be sent with other materials, e.g., new hire enrollment packets or other communications
Download the Model Notices using the links below:
- Model Notice (English), Model Notice (Spanish) - for employers without health plan
- Very simple to use, employer merely needs to add an employer contact name, phone number and email
- Model Notice (English), Model Notice (Spanish) - for employers with health plan – Part B requires more employer specific information
- Health plan information about who is covered, dependent coverage, wellness coverage (premium impact)
- If plan meets the minimum value standard (Note: your group plan has been tested for this and does meet the minimum value standard)
- Whether the employer intends the coverage to be affordable based upon the wages of the recipient
- Optional section that mirrors the Exchange Employer Coverage Tool to assist employees to understand their coverage choices
- Sample Model Notice - for you to reference when completing your model notice
Should you have any questions or need further assistance with your notice, please do not hesitate to contact our office.
Determine how you will distribute these to your employees
- Sample Cover Letter (English), Sample Cover Letter (Spanish) - provided to assist in communicating this information to your employees
- PPACA Guide for Employees (English), PPACA Guide for Employees (Spanish) - provided to assist your employees in understanding PPACA
For those that have embraced one of our online benefit systems (i.e., HRConnect, Employee Benefit Center), please return your completed model notice to our office so that we may upload it your online system.
Please note, this is only one employee notice requirement of PPACA, however there are several others. In the next few weeks, we will be providing you with additional documents to provide to your employees. We will also be providing additional information to clients who are not currently set up with an online benefits system. This online system will satisfy the requirements of the law and simplify the compliance administration process.
The preceding information has been provided to the Chamber courtesy of :
Maniaci Insurance Services, Inc.
500 Silver Spur Road, Suite 121
Palos Verdes, California 90275
Thank you for the opportunity to be of service.