Tag Archives: Health policy

Marketplace Notices – to Comply or Not to Comply?

Contributed by Rebecca Dobbs Bush

The deadline for employers to provide current employees with notice of health care coverage options available through the ACA Marketplace is October 1, 2013, right around the corner.    

The DOL has published model notices that employers can use to comply with the notice requirements:

§  Model Notice for employers who offer a health plan to some or all employees <http://www.dol.gov/ebsa/pdf/FLSAwithplans.pdf>

§  Model Notice for employers who do not offer a health plan <http://www.dol.gov/ebsa/pdf/FLSAwithoutplans.pdf>

On September 11, 2013, the DOL published FAQ’s confirming that there is no penalty tied to the Marketplace Notice requirement.  As this particular notice requirement was done as an amendment to the FLSA (instead of as an amendment to HIPAA or ERISA), the FAQ’s should not have been a surprise or considered as a drastic change in position by the department.

In light of the recently published FAQ’s, some are now advising employers not to publish the notices at all.  While there is not a penalty tied to the notice, employers should not forget that they are still legally required.  With the DOL increasing its scrutiny of welfare plans (and where such audits often consist of reviews to ensure proper plan documentation and these very type of notices are in place), it is not recommended to blatantly disregard the Marketplace Notice requirement. 

Instead, the confirmation of lack of penalty should simply be referred to as a reminder to not spend too much time or analysis on this Notice requirement.  In other words, just do your best to comply.  In addition, many employers that are getting caught up with the particulars of how to complete part B of the model notice and having difficulty completing it, are simply distributing part A of the Notice.  There are various considerations to take into account if you are considering this strategy and whether it is best for your company.  In that event, you may want to contact counsel for advice on the best options for your situation.  Keep in mind that when employers are eventually subjected to penalty exposure in 2015, that penalty exposure will be tied to whether or not a person accesses a subsidy at the Marketplace.  Whether a person can access a subsidy is dependent on the price and availability of the employer offering.   All of that information is to be included on Part B of the model notice.  Thus, without providing that information to an employee, the employee may very likely give inaccurate information at the Marketplace resulting in an inappropriate subsidy award.  In turn, increasing potential penalty exposure for the employer.

Also, remember that the Notice requirement is not over after you meet your October 1, 2013 distribution date.  Employers must also provide new employees with notice of health care coverage options available through the ACA Exchange “at the time of hiring.”  For 2014 the DOL will consider an employer to have given notice “at the time of hiring,” if the notice is provided within 14 days of the new employee’s start date.

Automatic Enrollment for Health Plans in 2014? Not Just Yet….

Contributed by Rebecca Dobbs

The Patient Protection and Affordable Care Act (ACA) requires all large employers (with more than 200 employees) to automatically enroll full-time employees in a health plan, if they offer one.  This provision was scheduled to take effect in 2014. Interestingly, it was done as an amendment to the Fair Labor Standards Act (FLSA)–a law that allows plaintiffs, i.e. employees, greater remedies than the Employment Retirement Income Security Act (ERISA) currently does.

The automatic enrollment provision of the ACA will most likely cause employers to feel an immediate cost impact.  Increasing enrollment in a sponsored health plan will instantaneously increase the monthly invoice an employer receives from its insurance carrier.

Pursuant to the automatic enrollment provisions, employers are required to notify employees that they will be automatically enrolled in a health plan and give them an opportunity to opt out—not much else is known outside of that. 

On February 9, 2012, the Department of Labor (DOL) issued a Technical Release which, among a few other things, announced that guidance on automatic enrollment will not be ready by 2014.  The DOL made clear that until such final regulations are published, employers will not be required to comply.

The DOL has indicated that this delay is necessary “[i]n view of the need for coordinated guidance and a smooth implementation process….”  While this applies to just about every provision of Health Care Reform, we’ll take any additional time to seek any clarity that we can get.