The U.S. Departments of Labor (DOL), Health and Human Services (HHS), and Treasury have announced that employer notification to employees regarding Patient Protection and Affordable Care Act (PPACA) health insurance exchanges will be postponed beyond the March 1, 2013, statutory deadline. Although the announcement does not specify a new date, it states that the timing for distribution of the notices will be in the late summer or fall of 2013, which will coordinate with the open enrollment period that begins in October 2013 for purchasing health insurance through the new exchanges. While there is no action for employers at this time, they should anticipate questions from employees as more attention is paid to this topic.
PPACA requires employers to provide all new hires and current employees a written notice about the exchanges. The notice must:
• Inform employees about the existence of the exchanges and give a description of the services provided
• Explain that employees may be eligible for a federal premium tax credit or a cost-sharing reduction if they purchase health insurance through the exchange because their employer’s plan does not meet the 60% “minimum value” standard
• Specify that employees purchasing coverage through exchanges may lose any employer contributions toward the cost of employer-provided coverage, and that all or a portion of the employer contributions may be excludable for federal income tax purposes.
The DOL is considering providing model generic language that could be used to satisfy the notice requirement or, alternatively, language based on information from the employer coverage template under the January 22, 2013, proposed rule on Medicaid, the Children’s Health Insurance Programs, and exchanges.
The delayed notification announcement appears in the federal agencies’ “FAQs about Affordable Care Act Implementation (Part XI),” dated January 24, 2013. The document also provides guidance on health reimbursement arrangements (HRAs) and other account-based arrangements; the DOL’s plan not to bring enforcement action against certain self-insured group health plans that are Employer Group Waiver Plans; fixed indemnity insurance policies that are not “excepted” benefits; and payment of the Patient-Centered Outcomes Research Institute fee by multiemployer plans.
For more information about the federal agencies’ announcement or for assistance with implementing PPACA’s requirements, please contact your Milliman consultant.