Health Care Reform-FAQ’s about the Exchange Marketplace Notice

All employers who are subject to the Fair Labor Standards Act (FLSA) must give the notice. This includes:

• All hospitals, nursing homes and other health care facilities regardless of size

• All public and private preschools, elementary and secondary schools, and institutions of higher education, regardless of size

• All governments and governmental agencies, regardless of size

• All other entities with $500,000 or more in annual dollar volume

Employers that are uncertain if they are subject to the FLSA may use the elaws – Fair Labor Standards Act Advisor compliance tool. (The FLSA is the law that has the minimum wage and overtime requirements. If the employer pays minimum wage and overtime based on the FLSA rules, the organization has probably determined it is subject to the FLSA.)

2. Who must receive the notice?

The notice must be given to all employees, including temporary, seasonal, part-time, and full-time workers. It does not matter if the worker is not eligible for coverage under the health plan sponsored by the employer, and never will be eligible. The notice must be given to employees covered by a union or multiemployer plan. The notice does not need to be given to COBRA participants, retirees, or dependents.

One method of determining who should receive the notice would be to give the notice to everyone on the employer’s payroll as of the notice date.

New employees who start work after the date the notice is generally distributed also must receive the notice within 14 days after they start work.

3. When is the notice due?

The notice is due by Oct. 1, 2013, but may be given before that date. If given earlier, employees hired after that date need to be given the notice within 14 days after their start date.

4. Can an employer provide the notice electronically?

The notice may be provided electronically to employees who routinely use a computer as part of their job. The employer may not simply post the notice on its website.

5. What other ways can an employer provide the notice?

The notice can be sent to the employee’s home or work address by first class mail. The instructions for providing the notice do not mention hand delivery, but that normally is an acceptable way to provide a notice, and should be acceptable for this notice. Simply posting the notice in a break room will not be adequate, however.

6. Does an employer have to use the same delivery method for all employees?

No. An employer could, for example, provide the notice electronically to home office employees who use computers as part of their jobs and mail the notice to employees working on an assembly line.

7. Are individualized notices required?

According to the DOL Technical Release, individualized notices are not required. As a practical matter, however, if the employer chooses to complete part 3, the notice will need to be individually prepared.

8. Which employees must receive the Spanish version of the notice?

The DOL instructions for the exchange notice do not address this question. Generally speaking, if a significant portion of the workforce is only literate in a language other than English, those employees should be provided a notice in the language they do speak and read. “Significant” often means 10 percent or more.

9. Please provide a summary of page 1 of the notice.

The model notice is intended to cover information the law says the notice must include.

The “What is the Health Insurance Marketplace?” section provides information on the main task of the marketplace (which is also called the exchange), which is to provide a web-based place to compare available health insurance and to enroll in a plan offered through the marketplace. Employees that meet financial requirements are eligible for an advanced tax credit – often called the subsidy – to help them pay their premium each month.

The “Can I Save Money on my Health Insurance Premiums in the Marketplace?” section provides basic information on how to qualify for the premium subsidy. Two main requirements apply – that the person not be eligible for employer-provided coverage that meets certain standards (which are described in the next section) and that the person’s income is low enough. The lower the person’s income, the larger a subsidy the person may receive.

The “Does Employer Health Coverage Affect Eligibility for Premium Savings through the Marketplace?” section provides more information on eligibility for the premium subsidy. If the person’s employer offers affordable, minimum value coverage, the employee is not eligible for a premium subsidy – even if he or she declines the employer-provided coverage. If, however, the person is not eligible for coverage, or the employer-provided coverage is not “minimum value” (it does not cover at least 60 percent of claims costs) or is not “affordable” (employee-only coverage costs more than 9.5 percent of the employee’s household income) the employee likely will qualify for a subsidy, as long as his or her income is low enough. (An employee who purchases coverage through his or her employer is not eligible for a premium subsidy, even if the coverage is not affordable and minimum value.)

The “Note” explains that individuals who purchase coverage through the marketplace typically will not receive an employer contribution toward that coverage. It also notes that only employer-provided coverage can be purchased on a pre-tax basis through a Section 125 cafeteria plan – marketplace coverage will be paid for with after-tax dollars.

10. Does an employer have to complete page 2?

The delay in the employer shared responsibility/play or pay requirements did not remove or change the requirement to provide this notice.

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