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Exchange Coverage Notice – October 1 Deadline

The first big requirement under the Affordable Care Act (ACA) is fast approaching, and employers face a compliance date of October 1, 2013. Employers covered by the Fair Labor Standards Act (FLSA) 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. Although the ACA’s employer mandate was delayed, the delay had no effect on the requirement for employers to provide this form.

Current employees must receive the notice by October 1, 2013. In addition, from that date forward, employers must provide the notice to each new employee at the time that he/she is hired. For 2014, the Department of Labor (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.

The notice informs the employee of:

  • The existence of the Health Insurance Marketplace (Marketplace), also called an exchange
  • A description of services
  • How to contact the Marketplace
  • Additional required information

The notice also provides information about the employer’s health plan, or lack thereof.

Model Notices

The DOL also created two model notices: one model for employers who do not offer a health plan and a second model for covered employers who offer a health plan for some or all employees:

Employers Covered by the Notice Requirement

The exchange notice requirement applies to all employers covered by the FLSA. Generally, the FLSA covers employers that employ one or more employees and who are engaged in, or produce goods for, interstate commerce. For most firms, a test of not less than $500,000 in annual dollar volume of business applies. The FLSA automatically covers some specific entities, including federal, state and local government agencies, hospitals and most schools.
Specific questions about whether your organization is covered by the notice requirement should be directed to your benefits administrator or other benefits expert.

Delivery of Notice

You must provide the notice in writing, and in a way that is understood by the average employee. The notice must be provided free of charge. 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.
The notice can be provided by first-class mail or electronically. Electronic delivery of the notice must meet the requirements of the DOL’s electronic disclosure safe harbor. Generally:

  • The administrator of the employee benefit plan must ensure that the system used to furnish the documents results in actual receipt of transmitted information (such as using a return-receipt or bounce back feature) and protects confidentiality of personal information relating to the individual’s account or benefits.
  • Electronic notification can be provided only if the participant has regular access to the employer’s electronic information system as part of his/her job duties, or has provided affirmative written consent to receive an electronic distribution.

This is just a general overview of the electronic notice requirements. More information about these requirements can be found by reading the existing regulation. Questions should also be directed to your benefits administrator or benefits expert.

Things to Know

  • The exchange notices require employer input.
  • The model notices can be modified as long as they provide the required content. Refer to DOL’s temporary guidance document for what needs to be included and consult with your benefits expert before making changes.
  • The notice must be provided to all employees: full-time and part-time.
  • Some of the information on the forms is optional. Your company may want to include the optional information if it is helpful to employees and will give them a better understanding of the exchange and of any company-offered coverage.
  • Some employers choose to provide additional information to employees along with the notice. For instance, some employers choose to provide additional general information regarding the ACA’s implementation or to explain the ACA’s actual effect on their employees. Again, consult with your current benefits administrator or other benefits expert as to any additional information you wish to provide.

Exchange Notice for ER Not Offering Coverage – English

Exchange Notice for ER Not Offering Coverage – Spanish

Exchange Notice for ER Offering Coverage – English

Exchange Notice for ER Offering Coverage – Spanish

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