Update: Effective Dates Extended for Model Exchange Notices
The U.S. Department of Labor's Employee Benefits Security Administration has extended the effective date of its model health insurance exchange notices through May 31, 2020, including:
Under the Affordable Care Act, employers are required to provide all new hires with a written notice about the ACA's health insurance exchanges, which are also known as marketplaces. Employers must provide the exchange notice to each employee, regardless of plan enrollment status or of part-time or full-time status. The DOL considers a notice to be provided "at the time of hiring" if the notice was provided within 14 days of an employee's start date.
The U.S. Department of Labor's (DOL's) model health insurance marketplace notice forms indicated that they were to expire at the end of January 2017. This had caused some concern among employers over whether the forms could still be distributed after their "expiration date." The short answer is yes, if the DOL does not issue updated forms.
The Affordable Care Act (ACA) requires all employers that are subject to the Fair Labor Standards Act to provide a notice to employees about the availability of insurance through the ACA's health insurance marketplace comprised of the federal or state-run public health insurance exchanges. As of Oct. 1, 2013, employers were required to provide this notice to current employees and, going forward, to new employees.
There is no requirement to distribute this notice to all employees on an annual basis, but the Employee Benefits Security Administration's Technical Release 2013-02 directs employers to provide the exchange notice to all new employees within 14 days of their start date.
Although in 2013 the DOL announced that no penalty would be imposed on organizations that fail to provide exchange notices to workers, benefits specialists advise that these notifications nevertheless be distributed either in printed form or electronically to new hires to avoid potential liability. While the guidance does not specify that current employees be given the notice annually, some benefit consultants think it's good practice to include the notice with open enrollment materials.
The DOL has two model notices to help employers comply, and the notices can be distributed either electronically or by hard copy:
Both notices had indicated in the upper right corner that they were to expire at the end of January 2017.
[SHRM members-only HR Q&A: What is the Health Insurance Marketplace notice requirement?]
Kim Buckey, vice president of client services at DirectPath, a Birmingham, Ala.-based employee engagement and health care compliance firm, recently answered questions about the expiring marketplace notice forms.
What marketplace notice forms should an employer use after that deadline?
"There is no fine or penalty under law for failing to provide the notice," Buckey said. "So if an employer simply stopped providing the form, there would be little consequence."
She explained that the notices are models provided for employers to use, but employers are free to provide the information in another format. Here is technical guidance that explains the content of the health insurance marketplace notice, in case employers want to write their own notice. "Many employers distribute their own version or a highly condensed version of the boilerplate, sometimes as part of an annual legal notices package or brochure," she pointed out.
Will there be an updated form?
"My sources at the DOL said that there doesn't seem to be anything coming down the pipeline in terms of a renewal form," Buckey noted. "The current version was renewed from 2014, and there were no changes at that time. Given the current situation in Washington with a new administration, it's unlikely there would be a new version out by Jan. 31."
Is it OK to use the old form?
"Yes, it's safe to use the 'expiring' notice," Buckey said. "That expiration date is, apparently, an Office of Management and Budget expiration date, so it's really meaningless unless the DOL was proposing changes to the form."
Compliance and Liability
As Buckey noted, a 2013 DOL FAQ on Notice of Coverage Options states that if an employer is covered by the FLSA, it should provide written notice to its employees about the health insurance marketplace but that there is no fine or penalty under the law for failing to do so.
Nevertheless, many benefits attorneys have recommended that employers subject to the FLSA provide the notice to employees, noting that noncompliance could increase the risk of liability related to a DOL audit or an employee lawsuit.
While efforts by the Trump administration and the GOP-majority Congress are underway to repeal and replace the ACA and to limit its regulatory burdens, as long as the law remains in effect, employers are advised to stay compliant with its reporting and notification requirements.
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