Effective March 1, 2013, employers must notify new and existing employees in writing about their state’s health benefit exchange and advance premium tax credits available through the exchange to help them purchase individual coverage.
The requirement is contained in Section 218b of the federal Fair Labor Standards Act of 1938. The U.S. Department of Labor (DOL) is charged with issuing regulations providing more specific guidance on the notice but has not yet done so. Section 218b requires the following information be included in the notice:
- A description of the services provided by the exchange and the manner in which the employee may contact the exchange to request assistance.
- If an employer provides employer-sponsored health coverage that does not provide minimum actuarial value (60 percent of expected costs for benefits provided under the plan), the employee may be eligible for a premium tax credit and reduced cost sharing (deductibles, copayments, and coinsurance) if the employee purchases individual coverage through the exchange.
- If an employee purchases a qualified health plan through the exchange, the employee may lose the employer contribution (if any) to any health benefits plan offered by the employer and that all or a portion of such contribution may be excludable from income for federal income tax purposes.
Update: On January 24, DOL issued guidance stating employers are not required to comply with the employee notification requirement until the rules are issued.
In the meantime, DOL said it is considering “model, generic language” among alternative methods for employers to comply with the notice requirement, adding that forthcoming guidance will provide employers flexibility and adequate time to comply with the requirement. DOL added it expects the timing for distribution of notices will be the late summer or fall of 2013 to coordinate with the exchange open enrollment period beginning October 1, 2013.
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