Agencies Delay PPACA Health Insurance Exchange Notice Deadline for Employers

By Kristi R. Gauthier, Esq. Clark Hill PLC

February 2013 – One of the new notices requirements the Patient Protection and Affordable Care Act (PPACA) imposes on employers is the Notice of Coverage Options Available through the Exchanges (Notice).

What is the Purpose of this Notice? The purpose of the Notice is to:

Inform the employee of the existence of state Exchanges under PPACA including a description of the services provided by the state Exchanges, and the manner in which the employee may contact the state Exchanges to request assistance;

If the employer’s plan does not provide minimum value (as defined by PPACA), notify the employee that he/she might be eligible for a premium tax credit if the employee purchases health coverage on a state Exchange; and

Notify the employee that if he/she purchases health coverage on a state Exchange, 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.

According to recently released Department of Labor FAQs, the Department of Labor is considering providing model language for use by employers to satisfy the Notice requirement. Future guidance on compliance with the Notice requirement is expected to provide employers with flexibility and adequate time to comply.

When Must the Notice Be Distributed? Originally, employers were to provide this Notice to all current employees no later than March 1, 2013, and to all new employees at the time of hire.  The Departments of Health and Human Services, Treasury, and Labor have extended the deadline for issuance of this Notice until further guidance issued, which is expected to be late summer or fall of 2013.

While the deadline for distribution of this Notice has been temporarily delayed, employers should still keep this on their PPACA 2013 compliance radar.

*This article is not intended to give legal advice. It is comprised of general information. Employers facing specific issues should seek the assistance of legal counsel.

Kristi R. Gauthier is a senior attorney in Clark Hill’s Birmingham office and concentrates her practice in Employee Benefits Law. Kristi has represented clients in a wide variety of employee benefits issues involving health and welfare benefits, as well as retirement plans. Kristi is admitted to practice in the State of Michigan, the U.S. District Court for the Eastern District of Michigan, and the U.S. Sixth Circuit Court of Appeals. She also is active in the legal community with memberships in the American Bar Association, the State Bar of Michigan, and the Oakland County Bar Association where she is a member of the Employee Benefits Committee. Kristi also serves as a member of the Clark Hill Diversity and Inclusion Committee. Kristi has lectured on various employee benefits issues, including ERISA compliance, healthcare reform, COBRA, section 125 plans, 403(b) plans and IRS plan correction programs. Kristi is also a co-author of the ABA publication ERISA Survey of Federal Circuits. Kristi was named a “Rising Star” by Michigan Super Lawyers in 2011.