Legal Alerts

10 May 2013

Health Care Reform – 2013 Coverage Option Notice Update

One of the required Health Care Reform provisions effective in 2013 is the requirement under the amendment to the Fair Labor Standards Act (FLSA) that employers provide each employee at the time of hire a written notice that describes: (1) the new coverage options that will be available to employees in 2014, including the existence of the Marketplace (referred to as Exchanges in the original statute); (2) an employee’s possible premium tax credit eligibility if the employer’s coverage does not provide “minimum value” and the employee purchases a qualified plan through the Marketplace, and (3) the consequent that an employee may lose the employer contribution (if any) for employer-offered health coverage if the employee chooses to purchase coverage through the Marketplace. Employers subject to other required FLSA employee notifications must provide this notice to each employee, regardless of whether or not enrolled in employer-provided health coverage and regardless of full-time or part-time status. A separate notice is not required for dependents or other individuals who may become eligible for employer-provided coverage.

While this notice was originally required to be provided to current employees not later than March 1, 2013, that deadline was postponed earlier this year. Effective, October 1, 2013, employers are required to provide the notice to each new employee within 14 days of the employee’s start date. In addition, employers are required to provide the notice to all current employees not later than October 1, 2013.

Consequently, if your open enrollment period will not allow the notice to be provided to current employees before October 1, 2013, the notice will have to be provided prior to open enrollment. It is possible to deliver the notice electronically if certain electronic disclosure requirements are met.The DOL has posted model language that will satisfy the content requirements for the notice in the form of model notices for employers who provide health coverage, for employers who do not provide health coverage, and an updated COBRA election notice that has been modified to make qualified beneficiaries aware of other coverage options available to them in the Marketplace. The model notices (including a redline to illustrate the changes made to the model COBRA election notice) are available here.Please contact Dannae Delano for more information about this required notice or any other questions regarding Employee Benefits or Qualified Plans.


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