Department of Labor releases update on employer notice to employees about the Marketplace
Update: Sept. 17, 2013 — Employer notification of the Marketplace
Update: July 24, 2013 — Department of Labor releases updated model notices
June 11, 2013
On May 8, the Department of Labor (DOL) released updated guidance as well as model notice forms for employers to use to notify their employees of coverage options on the Marketplace, as required by the Affordable Care Act (ACA).
The ACA requires employers1 to provide each employee at the time of hiring (or for current employees), written notice informing employees that:
- The Marketplace exists, including a description of the services provided by the Marketplace, and the manner in which the employee may contact the Marketplace to request assistance;
- If the employer plan’s share of the total allowed costs of benefits provided under the plan is less than 60 percent of costs, the employee may be eligible for a premium tax credit if the employee purchases a qualified health plan through the Marketplace; and
- If the employee purchases a qualified health plan through the Marketplace, 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 the contribution may be excludable from income for federal income tax purposes.
Employers are required to provide the notice to each new employee at the time of hiring beginning October 1, 20132. For employees who are current employees before October 1, 2013, employers must provide the notice no later than October 1, 2013. The notice is required to be provided automatically, free of charge.
Employers must provide a notice of coverage options to each employee, regardless of plan enrollment status (if applicable) or of part-time or full-time status. Employers are not required 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.
DOL provided model3 notice forms4 as temporary guidance in response to requests from employers who want to know their obligations under this ACA provision and begin to plan for implementation in the fall of 2013. Employers may rely on the guidance immediately. One model notice form is for employers who offer a health plan for some or all employees and a second model notice form is for employers who do not offer a health plan.
The notice must be provided in writing in a manner to be understood by the average employee. Notice can be sent via first-class mail delivery or electronically5.
Where can I find more information?
More information can be found at DOL deferred implementation of the notice requirement.
The information in this document is based on preliminary review of the national health care reform legislation and is not intended to impart legal advice. The federal government continues to issue guidance on how the provisions of national health reform should be interpreted and applied. The impact of these reforms on individual situations may vary. This overview is intended as an educational tool only and does not replace a more rigorous review of the law’s applicability to individual circumstances and attendant legal counsel and should not be relied upon as legal or compliance advice. As required by US Treasury Regulations, we also inform you that any tax information contained in this communication is not intended to be used and cannot be used by any taxpayer to avoid penalties under the Internal Revenue Code.
1 Subject to the Fair Labor Standards Act (the usual test is not less than $500,000 in annual dollar volume of business).
2 For 2014, DOL will consider a notice to be provided at the time of hiring if the notice is provided within 14 days of an employee's start date.
3 Employers may use one of the model notices or a modified version, but the notice must have the statutorily required content.
4 Model Exchange Notice for Employers That Do Not Offer a Health Plan; Model Exchange Notice for Employers That Offer a Health Plan
5 The notice may be provided electronically if the requirements of DOL's electronic disclosure safe harbor at 29 C.F.R. § 2520.104b-1(c) are met.