Employers will not have to start distributing notices to all employees on the existence of health insurance exchanges on March 1 as required by the health reform law.
This requirement is now deemed impracticable because many state exchanges have not been set up, and do not become operational until Jan. 1, 2014. Also, the requirement does not take effect until the U.S. Department of Labor issues a rule describing how to comply. That rule has yet to be issued.
Therefore, DOL issued a memo on Jan 24 stating that until such regulations are issued and become applicable, employers are not required to comply with that provision.
DOL said it expects it will move the date up to late summer or fall of 2013 before requiring employers to distribute the notices, which will be in time for the exchanges’ first open enrollment period.
Other Reasons for Delay
The requirement is being stayed for other reasons, DOL stated in a series of frequently asked questions:
- Educational efforts from the U.S. Department of Health and Human Services and IRS guidance on minimum value need to come out first.
- Employers need adequate time to both comply and let employees receive the information.
Notices Available Through Exchanges
DOL is considering providing model, generic language that could be used to satisfy the notice requirement.
It said compliance could be satisfied if employers give employees information using the employer coverage template as discussed in the preamble to the Proposed Rule on Medicaid, Children’s Health Insurance Programs, and Exchanges (the Jan. 22 Federal Register, see page 4641). That form will be available at exchange websites.
Future guidance on complying with the notice requirement is expected to provide flexibility and adequate time to comply.
The reform law required that employers provide each employee a written notice about the existence of health insurance exchanges to buy health coverage that are within price and value norms set by states, for use by employees in the event the employer offers either no coverage, unaffordable or inadequate coverage.
The now-postponed notice is supposed to include:
- a description of the services provided by the exchanges, and how the employee may contact exchanges to request assistance;
- an explanation that if the employer’s share for plan payments is less than 60 percent of such costs, that the employee may be eligible for a premium tax credit, if he or she purchases a qualified health plan through an exchange; and
- a statement saying if the employee buys a qualified health plan through an exchange, he or she may lose the employer contribution (if any) to any health plan offered by the employer and be excludable from income for federal income tax purposes.
See this story on Thompson Information Services’ website.