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April 19, 2014

Notice of Health Insurance Coverage Options Available Through the Exchanges

On May 8, 2013, the U.S. Department of Labor (DOL) published Technical Release No. 2013-02, which provides temporary guidance addressing the Patient Protection and Affordable Care Act's (ACA) required notice to employees regarding their coverage options under state and federally facilitated health insurance exchanges (Exchanges). 

As part of the ACA, an applicable employer was required to provide each employee at the time of hiring (or with respect to current employees, not later than March 1, 2013), a written notice:

  • Informing the employee of the existence of the Exchanges, including a description of the services provided by the Exchanges and the manner in which the employee may contact the Exchanges to request assistance

  • If the employer’s plan's share of the total allowed costs of benefits provided under the plan is less than 60 percent of such costs, that the employee may be eligible for a premium tax credit under section 36B of the Internal Revenue Code (the Code) if the employee purchases a qualified health plan through an Exchange

  • If the employee purchases a qualified health plan through an Exchange, that the employee may lose the employer contribution (if any) to any health benefits plan offered by the employer and that all or a portion of such contribution may be excludable from income for federal income tax purposes

FAQs about ACA Implementation Part XI published in January of this year pushed back the timing for distribution of these notices until late summer or fall of 2013.  This new technical release provides guidance on the notice requirement, but more importantly model notices.

The following are links to the DOL model notices:

© 2014 McDermott Will & Emery

About the Author

Partner

Amy Gordon is a partner in the law firm of McDermott Will & Emery LLP and is based in the Firm’s Chicago office.  She focuses her practice on the areas of welfare benefits, including self-funded and insured health plans. She assists clients in designing and maintaining compliant flexible benefit, life, medical, dental, pharmacy, EAP, educational assistance, disability, supplemental health, severance, Health Savings Accounts, Health Reimbursement Accounts, and other types of welfare plans.  She counsels clients with respect to HIPAA, ERISA and the Internal Revenue Code...

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