DOL Releases Model Notice and Guidance on PPACA’s Exchange Notice Requirement

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On May 8, 2013, the DOL issued Technical Release No. 2013-02, which includes temporary guidance and a model notice relating to the notice to employees of coverage option (known as the “Exchange Notice”) requirement under PPACA. As background, PPACA requires employers subject to the FLSA to provide each employee with a written notice that describes information about the state health insurance exchanges (also referred to as “marketplaces”), including the availability of premium tax credits and the implications relating to purchasing coverage through the exchanges. Originally, PPACA required employers to distribute the notice by March 1, 2013; but earlier this year the DOL delayed that effective date. Technical Release No. 2013-02 makes clear that employers must distribute the exchange notice to all current employees by Oct. 1, 2013. In addition, after Oct.1, 2013, employers must provide the exchange notice to new hires within 14 days of the employee’s start date.

Importantly, the notice must be distributed regardless of whether the employee is full-time or part-time and regardless of whether the employee is actually eligible for coverage. For this purpose, Technical Release No. 2013-02 provides two model notices to assist employers in providing the required information: Notice for Employers Without Health Plans and Notice for Employers With Health Plans. The former includes (among other things) a brief description of the exchanges, the circumstances under which a premium tax credit may be available, and a link to a website for further information and an exchange enrollment application. The latter includes all of that information, as well as specific information relating to the employer’s health plan (e.g., whether the plan meets the minimum value standard, whether the coverage is affordable, etc.).

Now that the model notices are available and the effective date is known, employers should begin preparations for drafting and distributing the notices. Employers should review the model notices and determine what plan-specific language, if any, it should include in the notices.

Technical Release No. 2013-02

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