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Employer Notice of Coverage Options

Employer Notice of Coverage Options

As a requirement of the Patient Protection and Affordable Care Act (PPACA), all employers with over $500,000 in annual revenue are required to notify all employees about their healthcare options available through the Health Insurance Exchanges.  This Benefits Bulletin addresses the temporary guidance of this notification that was issued on May 8, 2013.

Employers are not yet required to provide notices under this temporary guidance, and can wait until formal guidance is provided later this year.

This notification is called the Employer Notice of Coverage Options, and a template is located at http://www.dol.gov/ebsa/pdf/FLSAwithplans.pdf.  Originally scheduled for March 1, 2013, this notice deadline has been delayed until October 1, 2013 to coincide with the beginning of the Health Insurance Marketplace (Exchange) open enrollment period.

 

 

The Employer Notice of Coverage Options is meant to:

  • Be a one-time notice provided by employers on or before October 1, 2013;
  • Be provided to all current full-time and part-time employees employed as of October 1, 2013, regardless if they are enrolled in, or eligible for, an employer-sponsored plan;
  • Be provided regardless if an employer-sponsored plan is offered;
  • Be provided to employees, with no requirement on providing the notice to spouses or dependents;
  • Be provided in writing, but can be provided electronically if ERISA standards for electronic delivery are met (http://www.dol.gov/ebsa/regs/fedreg/final/2002008499.htm);
  • Be provided to new employees within 14 days of being hired after October 1, 2013;
  • Contain language that:
    • The Marketplace exists, including a description of the services it provides and direction for employees to visit HealthCare.gov for more information;
    • Employees who purchase coverage through the Marketplace may be eligible for a premium subsidy if their employer does not provide coverage that is “affordable” and provides a “minimum value”;
    • Coverage is affordable if the employee-only option for the lowest-cost plan offered costs less than 9.5% of an employee’s W-2 wages;
    • Coverage provides minimum value if the plan pays at least 60% of allowed charges for covered services;
    • Employees who purchase coverage through the Marketplace will pay for that coverage with after-tax dollars;
    • Details the medical coverage the employer offers to its employees.

Employers can use the template Employer Notice of Coverage Options, or create their own notice, as long as the information above is included.

COBRA Notification Change

Employees, spouses and dependents who become eligible for COBRA will also have the option to purchase coverage through the Marketplace.  The model COBRA notice that employers and COBRA administrators use has been revised to include information about the Marketplace, and can be found at http://www.dol.gov/ebsa/cobra.html.

More information can be found at:

http://www.dol.gov/ebsa/newsroom/tr13-02.html

http://www.dol.gov/ebsa/pdf/FLSAwithplans.pdf

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