Employer Notice Regarding Health Insurance Exchanges

Under the Patient Protection and Affordable Care Act (PPACA), health benefit exchanges will be operational on Jan. 1, 2014. PPACA requires employers to provide a notice to all benefits eligible employees prior to the beginning date of the exchange.

The notice informs employees about the existence of the health benefits exchange and gives a description of the services provided by the exchange. The notice also explains how the employee may be eligible for a premium tax credit or a cost-sharing reduction if the employer's plan does not meet certain requirements. The notice informs employees that if they purchase a qualified health plan through the exchange, they may lose any employer contribution toward the cost of employer-provided coverage, and that all or a portion of the employer contribution to employer-provided coverage may be excludable for federal income tax purposes. Lastly, the notice includes contact information for customer service resources within the exchange, and an explanation of appeal rights.  The notification requirement will take effect on October 1, 2013.  Employers who do not provide this notice to eligible employees by October 1^st will not be assessed a penalty but compliance is strongly encouraged.

Employers will need to provide new employees the notice within 14 days of their start date.  For current employees, employers will need to provide the notice to their employees no later than October 1, 2013.  For employees who may be electing COBRA, employers must also provide the notice with their COBRA letter as well.

Earlier this year, the Department of Labor provided employers with sample “Notices” to use if their company offered health insurance or if they did not offer health insurance.  Employers will be able to use this sample “Notice” until the Department of Labor creates a final version “Notice” for all employers to use.  Please click here to view the sample “Notice”.  Employers can click here to review the guidelines regarding the exchange notice.  If your company does not offer health insurance, please click here to view the “Notice” you have to provide to your employee population.

The notice must be provided in writing to all benefits eligible employees.  Alternatively, it may be provided electronically if the requirements of the DOL's electronic disclosure safe harbor at 29 CFR 2520.104b-1(c) are met.

If your company has any questions regarding these “Notices” or has general questions regarding the new Health Care Reform laws, please feel free to contact Ipswich Bay Advisors at our offices at 978.777.6554.

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Medicare Part D Credible Coverage

All employers who provide health insurance coverage to their employees must provide a notice of Credible Coverage to all Medicare eligible employees.  The notice is to inform these employees the prescription drug benefit that is provided through the company’s health insurance plan is equivalent to or superior to the Standard Medicare Part D plan.  If a company’s prescription drug plan does not meet the credible coverage requirements, employers must still provide a notice to the eligible employees stating their plan does not meet this minimum requirement.  Employers must provide each Medicare eligible employee with this notice once a year.  The notice must also be provided to the dependents of the eligible Medicare employee.  The Centers for Medicare & Medicaid Services has provided employers with a template notice to use as guidance when generating these notices.  Please click here to view the sample notice provided by the Centers of Medicare & Medicaid Services for credible coverage.  If your company’s prescription drug benefit does not meet the minimum credible coverage, please click here for the Non-Credible Coverage Model Notice.

The last requirement employers are responsible for is to complete an online questionnaire provided by the Centers for Medicare & Medicaid Services.  This questionnaire will inform CMS if your company’s prescription drug benefit is credible or non-credible.  Employers should complete the online questionnaire roughly 60 days before their health insurance plan renews or is effective.  The questionnaire should also be completed if the plan is terminated or if there is any status change.  For these situations, the questionnaire should be completed in 30 days after the termination or status change.  Please click here to view the questionnaire employers are required to complete.

For more information regarding the distribution & completion of the Medicare Part D Credible Coverage Notice, please contact our office.

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