QUESTION: Our company employs approximately 25 employees (some part-time) and sponsors an insured group health plan. In 2013, we provided a notice about the Exchange to all of our employees. Do we have an ongoing obligation to provide this notice and, if so, can our insurer send it for us?
ANSWER: Your company must continue to provide this notice about the Exchange—but only to new employees. As background, the Affordable Care Act amended the Fair Labor Standards Act to require that employers provide all employees with a written notice about the health coverage options that are available through the Exchange, and some of the consequences if an employee decides to purchase a qualified health plan through the Exchange in lieu of employer-sponsored coverage. (This notice is often referred to as the “Exchange Notice.”) The DOL has made available model notices
Employers were initially required to provide the notice to existing employees by October 1, 2013. But you also have an ongoing obligation to provide the notice to new employees, within 14 days of their start date. The notice that is provided to new employees should reflect current employer plan information, so it will need to be updated from time to time. Each employee must be provided an Exchange Notice regardless of plan eligibility or enrollment status, or of part-time or full-time status. Employers are not required, however, to provide a separate notice to dependents or other individuals who are or may become eligible for coverage under the plan but who are not employees. Also, there is no requirement to provide the notice to covered individuals who are no longer employees, such as retirees or COBRA beneficiaries.
Another entity (such as your insurer) may provide the Exchange Notice on your behalf. However, an employer is not relieved of its obligation if another entity fails to provide the notice to all employees. And, as a practical matter, 14 days is a short timeframe for the employer to provide a new employee’s information to another entity that then sends the notice. Although there is no fine or penalty for failing to provide the Exchange Notice, the information conveyed in the notice is important. It may be critical for employees deciding whether to enroll in Exchange coverage to have this information, which can assist them in making informed decisions based on employer plan details (e.g., the affordability of employer coverage for purposes of qualifying for premium tax credits).
For more information, see EBIA’s Health Care Reform manual at Section XXI.E (“Exchange Notice”).
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