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FAQ on Notice of Coverage Options for ACA’s New Health Insurance Marketplace

In a brief Frequently Asked Question (FAQ) document quietly issued yesterday, the U.S. Department of Labor formally clarified there is no penalty associated with provision of the Exchange Notice.  The guidance states that employers “should provide a written notice to its employees about the Health Insurance Marketplace by October 1, 2013, but there is no fine or penalty under the law for failing to provide the notice.”  Therefore, employers should send out the Exchange Notice, but there would be no penalty if someone is missed. (This FAQ does not state or imply that employers no longer have to send out the notice.)

A link to the FAQ can be found here.

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Notice of Coverage Options Available Through the Exchanges

by Amy M. Gordon

On May 8, 2013, the U.S. Department of Labor (DOL) published Technical Release No. 2013-02, which provides temporary guidance addressing the Patient Protection and Affordable Care Act’s (ACA) required notice to employees regarding their coverage options under state and federally facilitated health insurance exchanges (Exchanges).

As part of the ACA, an applicable employer was required to provide each employee at the time of hiring (or with respect to current employees, not later than March 1, 2013), a written notice:

  • Informing the employee of the existence of the Exchanges, including a description of the services provided by the Exchanges and the manner in which the employee may contact the Exchanges to request assistance
  • If the employer’s plan’s share of the total allowed costs of benefits provided under the plan is less than 60 percent of such costs, that the employee may be eligible for a premium tax credit under section 36B of the Internal Revenue Code (the Code) if the employee purchases a qualified health plan through an Exchange
  • If the employee purchases a qualified health plan through an Exchange, that the employee may lose the employer contribution (if any) to any health benefits plan offered by the employer and that all or a portion of such contribution may be excludable from income for federal income tax purposes

FAQs about ACA Implementation Part XI published in January of this year pushed back the timing for distribution of these notices until late summer or early fall.  This new technical release provides guidance on the notice requirement, including setting a notice deadline of October 1, 2013 for current employees. More importantly, the new technical release provides model notices.

The following are links to the DOL model notices:

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DOL Extends Notification Deadline for Purchase of Medical Benefits on Health Insurance Exchanges

by Amy M. Gordon and Susan M. Nash

The U.S. Department of Labor (DOL) pushed back the deadline for employers to notify their workers that they can purchase medical benefits on health insurance exchanges.  The original deadline was March 1, 2013, and has now been moved to late summer or early fall 2013.  The DOL said it was aiming for a “smooth implementation process” that would balance the need to give employers sufficient time to comply with the desire that notices be distributed closer to the October 1, 2013 start of exchange enrollment.

In its announcement, the DOL said it might provide “generic language” that employers could distribute to satisfy the notice requirement.  Alternatively, the DOL said it might allow use of a template that was discussed in the proposed rules published in the Federal Register (See Volume 78, Number 14, Tuesday, January 22, 2013).

The notices are required to have three components:

  • The first will inform workers that exchanges exist, what benefits they offer and how they can get in touch with an exchange.
  • The second must tell individuals they might qualify for tax credits to subsidize purchase of insurance on exchanges if their company health plan covers less than 60 percent of costs. However, a minimum value calculator hasn’t yet been released by the U.S. Department of Health and Human Services and the Internal Revenue Service.
  • The third will let individuals know that if they buy medical coverage through an exchange, they could lose the employer’s contribution to the employer’s group medical plan.

We will keep you updated as further guidance is released.

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The Patient Protection and Affordable Care Act: The Supreme Court Decision

by Christopher M. Jedrey, Joel L. Michaels, Susan M. Nash, Paul W. Radensky and Eric Zimmerman

While the Supreme Court of the United States has in large part resolved questions regarding the constitutionality of the Patient Protection and Affordable Care Act, participants in the health care industry should prepare for ongoing uncertainty in the manner and degree to which states will participate in the expansion of Medicaid.

To read the full article, click here.

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