MANDATORY NOTICE FROM EMPLOYERS TO EMPLOYEES FOR THE AFFORDABLE CARE ACT DUE BY OCTOBER 1, 2013!
One of the main provisions of the Affordable Care Act is the establishment of a health insurance marketplace called an exchange. The exchange is a governmental agency set up in each state where individuals and small businesses (50 or less full/time equivalent employees for right now) can purchase health insurance from insurance companies regardless of any preexisting conditions. Some individuals may qualify for financial assistance for the premiums via an Advanced Premium Tax Credit as well Cost Sharing Reductions. Some businesses may qualify for a Small Business Tax Credit. In order to take advantage of these subsidies, the health insurance must be obtained via the exchange.
The Affordable Care Act has put the responsibility on informing employees about the exchanges on employers subject to the Fair Labor Standards Act (FLSA) regardless of whether or not you currently have a group plan established.
Here is the link to the Department of Labor’s guidance regarding this required notice:
Pages 3 and 4 do a good job of explaining the requirements of the notice and links to the model notices are provided in Section E. There are two separate notices, a Model Notice for those employers currently sponsoring a plan and a Model Notice for those that do not.
If you are currently sponsoring a plan, pages 1 and 2 should be completed with page 3 being optional. You will notice on page 2 the question regarding whether or not your plan meets the “minimum value standard.” This is a difficult and complicated actuarial calculation defined in the Affordable Care Act. There are no requirements for small businesses to offer minimum value coverage and a delay in penalties for large employers. As a result, the answer to this question is for informational purposes only at this time to help the exchange qualify individuals that may be eligible for the subsidies.
At this point, CareFirst is the only carrier that has performed this calculation and has advised that all of their plans for groups up to 200 do meet the minimum value standard. Therefore, if you are a CareFirst client, you can check this box confirming that your plan meets this standard.
All of the other carriers have been silent to date and we do not have indication that they will be providing this information. In an effort to provide you with some direction, we contacted the Department of Labor/Employee Benefit Security Administration directly. They indicated that the notice they provided was simply a “model” and employers could edit and answer that question as they see fit. Here is an example of what you could use: “we are unable to determine whether our current plan meets minimum value as our current insurance carrier has not provided us with this information.”
The notices are due to the employees by October 1, 2013. Please call us if you have any questions.