May 13, 2013
Employers Must Provide Employees with Exchange Notice by October 1, 2013 – Model Notices are Released
Source: Department of Labor Technical Release 2013-02
On May 8, 2013, the Department of Labor (DOL) released temporary guidance on the Exchange Notice requirement. This temporary guidance will stay in place until the DOL issues regulations or further guidance. Employers must provide employees with an Exchange notice by October 1, 2013. The notice is meant to inform employees about the existence of the Exchange and describe the services provided as well as explain that employees may be available for a premium tax credit or cost-sharing reductions if the employer’s plan does not meet certain requirements (affordability and minimum value),
The DOL provided two model Exchange notices:
- A model Exchange notice for employers who do not offer a health plan; and
- A model Exchange notice for employers who do offer a health plan to some or all employees.
Who Must Receive a Notice?
Employers must provide the Exchange notice to each employee, regardless of plan enrollment status or of part-time or full-time status. Employers do not need to provide a separate notice to dependents.
Employers must provide the notice to both new hires and current employees as follows:
- New Hires: must provide a notice to each new employee at the time of hire beginning October 1, 2013. The DOL will consider a notice to be provided at the time of hire if the notice is provided within 14 days of the employee’s start date.
- Current Employees: For employees who are employed before October 1, 2013, employers must provide the notice no later than October 1, 2013.
Methods of Providing the Notice:
The notice must be provided in writing in a manner that is understandable by the average employee. It may be provided by first-class mail. The notice may also be provided electronically if the following requirements of the DOL’s electronic disclosure are met: Employees with work-related computer access and other plan participants and beneficiaries who have consented to receive disclosure electronically.
REVISED COBRA ELECTION NOTICE:
According to the DOL, some COBRA beneficiaries may want to consider and compare Exchange health coverage alternatives to COBRA continuation coverage. Qualified beneficiaries may also be eligible for a premium tax credit for an Exchange plan. As such, the DOL has updated its model COBRA election notice to help make beneficiaries aware of the coverage options available in the Exchanges.
The full details regarding this guidance can be found in the DOL’s Technical Release 2013-02.
Why is this Important?
Employers are required to provide the appropriate Exchange notice to employees no later than October 1, 2013. In addition, COBRA election notices must be updated to provide information about Exchanges.
Kentucky Expands Medicaid Coverage
Source: NAHU Newswire
Kentucky Governor Steve Beshear announced Thursday, May 9th, that Kentucky will expand the federal and state Medicaid program to provide coverage to an estimated 300,000 Kentuckians without health insurance. Medicaid already provides coverage to more than 800,000 Kentuckians.
The expansion of Medicaid will include people whose income is at or below 138% of the poverty level. Beshear said that means that someone making $15,415 a year or less, or a couple making $20,879 a year or less, would be eligible for Medicaid beginning January 1, 2014. Taxpayers that are eligible for Medicaid coverage are not eligible for a federal Exchange tax credit.
Kentucky becomes the 21st state to expand Medicaid, a key provision of the Affordable Care Act. In 2012, the U.S. Supreme Court decision upheld the law but left the expansion of Medicaid up to states. To view a map of States who have and have not expanded their Medicaid programs, click here.
Why is this Important?
- Employees in States, who have chosen to expand Medicaid eligibility, will not be eligible for a tax credit on the Exchange.
- For employers who offer coverage that is both of minimum value and affordable, the risk for the Pay or Play Penalty is reduced by the number of Medicaid eligible employees.