January 28, 2013
ACA update: DOL delays health insurance exchange notice distribution requirement
By Martin Simon, JD, Senior Legal Editor

The U.S. Department of Labor (DOL) has stated that the March 1, 2013 deadline for employers to distribute notices about the availability of health insurance exchanges has been delayed until the late summer or fall of 2013, which will coordinate with the open enrollment period for exchanges.

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The announcement came in the agencies latest series of FAQs About Affordable Care Act Implementation.

Under this notice requirement, employers are to provide to current employees and each employee at the time of hiring written notice informing the employee of the following:

  • The existence of an exchange, including a description of the services provided by such an exchange and how the employee may contact the exchange 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 such costs, that the employee may be eligible for a premium tax credit under section Internal Revenue Code Sec. 36B if the employee purchases a qualified health plan through an exchange; and
  • If the employee purchases a qualified health plan through an 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.

DOL says that it is delaying the exchange notice requirement for several reasons including that the notice should be coordinated with the Department of Health and Human Services educational efforts and Internal Revenue Service guidance on minimum value and that DOL is committed to a smooth implementation process including providing employers with sufficient time to comply and selecting an applicability date that ensures that employees receive the information at a meaningful time.

DOL is considering providing model, generic language that could be used to satisfy the notice requirement. As a compliance alternative, the agency is also considering allowing employers to satisfy the notice requirement by providing employees with information using the employer coverage template, which will be available for download on insurance exchange websites as part of the streamlined application that will be used by exchanges, Medicaid, and CHIP.

Future guidance on complying with the exchange notice requirement is expected to provide flexibility and adequate time to comply.

For the latest compliance news and information on the ACA/health care insurance reform, visit our Health Care Reform Resource Center for Employers.

Martin Simon, J.D. is a Senior Legal Editor for BLR’s human resources and employment law publications. Mr. Simon has worked in legal publishing for over 20 years. He worked for 7 years as a legal editor for Prentice Hall, where he wrote and edited for the Pension and Profit Sharing and the Plan Administrators Compliance Manual looseleaf services. He has been a legal editor for BLR for more than 17 years. Mr. Simon has been on the Board of the Hartford Chapter of Working in Employee Benefits for 4 years. Mr. Simon has a B.A. degree with Honors from the University of Connecticut, where he was a member of the Honors Program and Phi Beta Kappa. He received his law degree from the University of Connecticut and is a member of the Connecticut Bar.

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