Get Ready For the New Marketplace Notices This Fall

By Kristi R. Gauthier, Esq.
Clark Hill PLC

June 2013 – The Department of Labor (DOL) has issued guidance under the Patient Protection and Affordable Care Act (PPACA) on the new employer requirement to provide a notice to all employees detailing information regarding health coverage options available through the Health Insurance Marketplace (formerly referred to as the “exchange”).  The DOL has released two model notices for employers to use depending on whether or not the employer offers a health plan. Employers may rely upon the model notices to comply with the Marketplace notice requirement.

In addition, the DOL has also revised the model election notice under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) to provide information to qualified beneficiaries on the availability of coverage in the Marketplace.

What is the Marketplace?
Beginning in January 2014, individuals will have access to affordable coverage through a new competitive private health insurance market now being referred to as the “Health Insurance Marketplace” or “Marketplace” (formerly referred to as the “exchange.”)  The Marketplace is intended to be a one-stop shop for individuals to shop for affordable health insurance coverage.  Open enrollment for coverage in the Marketplace is scheduled to begin on October 1, 2013.

What are the purpose of the notices?
The notices are intended to provide employees with information regarding the Marketplace, health coverage options available, contact information and a description of services provided by the Marketplace. The notices also address tax credits that may be available to employees, as well as a statement informing employees that if an employee purchases coverage on the Marketplace, the employee may lose the employer contribution, if any, to any health benefits plan offered by the employer. For employers that offer a health plan, the notice also provides information about the employer’s plan to assist employees in evaluating their coverage options.

Who must receive a notice?
Employers subject to the Fair Labor Standards Act (FLSA) must provide a notice to every employee, regardless of enrollment status in a health plan or employment status (e.g., full-time, part-time) and regardless whether the employer sponsors a group health plan. Employers are not required to provide separate notices to dependents or other individuals who are or may become eligible for coverage under the plan, but who are not employees.

When must the notice be provided?
A notice must be provided to all existing employees no later than October 1, 2013. On and after October 1, 2013, the notice must also be provided to any new employees within 14 days of the employee’s hire date.

The notice may be provided by first-class mail, or electronically if the requirements of the DOL’s electronic disclosure safe harbor are met.  29 CFR 2520.104b-1(c).

Where can employers obtain a copy of the model notices?
The model notices may be obtained via the following links:

• Model notice for employers who offer a health plan to some or all employees, available at http://www.dol.gov/ebsa/pdf/FLSAwithplans.pdf

• Model notice for employers who do not offer a health plan, available at http://www.dol.gov/ebsa/pdf/FLSAwithoutplans.pdf

What changes have been made to the COBRA model election notice?
In light of PPACA, on and after January 1, 2014, COBRA qualified beneficiaries may want to consider and compare health coverage alternatives that will be available through the Marketplace to COBRA continuation coverage. Employers should revise their COBRA election forms to provide information regarding the Marketplace and comply with these new requirements.  Alternatively, employers should work with their COBRA administrators to ensure proper compliance.
The DOL has provided an updated COBRA model election notice which is available at: http://www.dol.gov/ebsa/cobra.html.

*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.