Transamerica Institute

New Exchange Notice Requirements for Employers

Beginning on October 1, 2013, employers must provide a notice to employees of their health coverage options.  In general, the requirement applies to employers that employ one or more employees who are engaged in, or produce goods for, interstate commerce with over $500,000 annual “sales made or business done.

 Many businesses with under $500,000 in annual sales or business are exempt from this requirement.  This exemption does not apply to

  • A hospital, or an institution primarily engaged in the care of the sick, the aged, or the mentally ill or developmentally disabled who live on the premises (both for profit and not-for-profit)
  • A pre-school; elementary or secondary school or institution of higher learning (e.g., college); or a school for mentally or physically handicapped or gifted children (applies to public or private for profit or not-for-profit)

 To find out if you are required to provide a notice of the State Exchanges to your employees, visit the U.S Department of Labor Fair Labor Standards Act Advisor.

Businesses and Employers that Provide Health Care Insurance

If you provide health insurance to your employees, you must give notice regarding the coverage you offer as well as the option of State Exchanges. Employers must provide a notice of coverage options to each employee covered or not covered, part or full-time.  Employers are not required to provide a separate notice to dependents or other individuals who are not employees. Employers must also distribute the notice to new hires within 14 days of the hire date.

The notice to inform employees of coverage options must include:

  1. Information regarding the existence of a new State Exchange
  2. Contact information and description of the services provided by an Exchange.
  3. That the employee may be eligible for a premium tax credit if the employee purchases a qualified health plan through an Exchange
  4. Statement informing the employee that if the employee purchases a qualified health plan through an Exchange, the employee may lose the employer contribution to any health plan offered by the employer.

The Department of Labor (DOL) provides model exchange notices for employers that offer health care coverage to their employees can be accessed here

Businesses and Employers that Do Not Provide Health Care Insurance

If you do not offer health insurance to your employees, you must still provide notice regarding the option of State Exchanges. You are not obligated to pay for coverage in your State Exchange. The notice to inform employees of coverage options must include:

  1. Information regarding the existence of a new State Exchanges
  2. Contact information and description of the services provided by an Exchange.
  3. Inform the employee that the employee may be eligible for a premium tax credit if the employee purchases a qualified health plan through an Exchange
  4. Statement informing the employee that if the employee purchases a qualified health plan through an Exchange, the employee may lose the employer contribution to any health plan offered by the employer.

 

The Department of Labor (DOL) provides model exchange notices for employers that do not offer ealth care coverage can be accessed here. 

The notice is required to be provided automatically, free of charge. The notice must be provided in writing in a manner that can be understood by the average employee. It may be provided by first-class mail. Alternatively, it may be provided electronically if the requirements of the Department of Labor’s electronic disclosure rules are met.