Health Insurance Exchanges Starting October 1, 2013
If you currently employ any employees or have started payroll this year, on October 1, 2013, you have the requirement to provide notice to your employees about the Patient Protection and Affordable Care Act (PPACA). The PPACA has brought a lot of changes for employers and employees alike. If you are subject to the requirement but haven’t sent out the notice yet, below is some information about what’s required and where to find an example to help you. Also, if you offer health insurance to your employees, your health insurance provider may have already sent them this notification. Contact your health insurance provider to make sure you are in compliance if you are unsure.
Health Insurance Exchange Notice
The new health care law known as the Patient Protection and Affordable Care Act (PPACA) requires the establishment of a health insurance exchange in all states by October 1, 2013, and most individuals (including children and other dependents) to carry health insurance starting January 1, 2014. The goal is that exchanges, working with private insurers, will act as a marketplace and provide “one-stop shopping” for individuals and families who may need health insurance or who seek less expensive coverage. Its companion program, the Small Business Health Options Program (SHOP Exchange), is set up to assist small businesses that would like to offer insurance to their employees.
PPACA amended the Fair Labor Standards Act (FLSA) to require that employers provide each employee with notice about the exchanges. This notice requirement applies to:
- Employers that employ one or more employees who are engaged in, or produce goods for, interstate commerce.
- An employer must have at least $500,000 in business annually.
- This also applies to hospitals, schools, and governmental agencies.
How to Satisfy the Notice Requirement
Employers must provide notice to their existing employees by October 1, 2013, and must provide notice to new employees hired on or after October 1, 2013. Each employee must receive notice, regardless of the employee’s health plan enrollment status and part- or full-time employment status. Notice may be provided in writing or electronically under the Department of Labor’s electronic disclosure rules.
Specifically, the notice must inform the employee:
- Of the existence of the exchange, the services provided by the exchange, and contact information for the exchange.
- That the employee may be eligible for a premium tax credit under the Internal Revenue Code if (a) the employer pays less than 60 percent of the cost of health insurance offered by the employee; and (b) the employee purchases health insurance through the exchange.
- That an employee who purchases health insurance through an exchange may lose the employer’s (tax-free) contribution to the cost of health insurance offered by the employer.
To satisfy this notice requirement, the Department of Labor has provided model notices on its website, at http://www.dol.gov/ebsa/
No Need to Panic If You’re Late With The Notice
Don’t panic if you’re a little late getting the notice out. The Department of Labor has stated that though employers are required to provide this notice, they cannot be fined or penalized for failure to do so. However, providing the notice is a requirement, and your employees will need the information provided by the notice to be able to purchase health insurance on the exchange, so please don’t delay sending out the notice because there is no associated penalty.
You can find Idaho’s official health insurance exchange at http://www.yourhealthidaho.
If you have questions about this requirement or want help to comply with the requirement, you may contact our office.