Traps for the Unwary: Employer Notices on Health Exchanges

September 11, 2013

pic-healthUnfortunately, operating a business in America today involves navigating a legal minefield. Unexpected legal liability or expensive litigation can ensnare businesses that do know the law. And the law can be absurdly complex and counter-intuitive. In NSBA’s “Traps for the Unwary” series, we aim to offer insight on a wide variety of subjects including labor, employment, occupational safety, tax, employee benefits, securities, business entity, intellectual property, immigration, federal contracting, contract and tort law. This series should not be construed as legal advice.

Health Insurance Exchange Notifications

The Patient Protection and Affordable Care Act (PPACA) requires that employers provide employees with a notice of their coverage options available through the health insurance exchanges no later than Oct. 1, 2013–just weeks away.

Beginning Jan. 1, 2014, individuals and employees of small businesses will have access to health coverage through a health insurance exchange (generally over the internet) operated by their state, their state in partnership with the federal government or the federal government directly. Open enrollment for the exchanges is set to begin Oct. 1, 2013.

Employers must provide the “Marketplace Notice” to their current employees by Oct. 1, 2013. The notice also must be provided to new-hires on and after October 1, 2013. For new-hires, the notice will be considered timely if it is provided within 14 days of their start date. The notice may be provided by first class mail, or electronically under the Department of Labor’s electronic disclosure safe harbor rules, which generally permit email or other electronic disclosure for employees who have computer access as a regular part of their job functions or consent to electronic disclosure.

To satisfy the content requirements, two model “Marketplace Notices” are now available on the Department of Labor’s website. There is one model for employers who do not offer a health plan and another model for employers who do offer coverage to some or all employees. To read the model for employers who do not offer a health plan, click here.  To read the model for employers who do offer coverage to some or all employees, click here.  The two model notices are similar, but the model for employers that offer health coverage must also describe which of its employees are eligible for coverage, which dependents are eligible for coverage, and whether coverage provides minimum value and is intended to be affordable.

This notice is required by section 1512 of the PPACA (as amended) which creates a new section 18B of the Fair Labor Standards Act (29 USC 218b).  Given the structure of the law, it is not entirely clear what penalties can be imposed on non-compliant businesses by the Department of Labor.

Please click here to read Traps for the Unwary #1: Arrest Records & Employment.

Please click here to read Traps for the Unwary #2: Social Media Policies.

Please click here to read Traps for the Unwary #3: Selling Stock in your Company.

Please click here  to read Traps for the Unwary #4: Preserving Limited Liability.

Please click here to read Traps for the Unwary #5: Credit, Consumer Reports & Hiring.

Please click here to read Traps for the Unwary #6: Employee Non-Compete Agreements.

Please click here to read Traps for the Unwary #7: Finders.

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