Pursuant to the Affordable Care Act, open enrollment for healthcare coverage through the States’ Marketplaces (or “Exchanges”) begins October 1, 2013. The purpose of the Marketplace Notice is to provide employees with certain information regarding the Marketplace.
The Affordable Care Act requires all employers to provide “Marketplace Notice” to all employees no later than October 1, 2013. This requirement applies to all employers whether or not the employer offers health care coverage to any of its employees. The employer must provide the Marketplace Notice to all employees, full time and part time and regardless of whether the employee is enrolled in the employer’s healthcare plan.
 The Affordable Care Act requires that all employers, within the meaning of the Fair Labor Standards Act (FLSA), comply with this notice requirement. The FLSA defines “employer” as any individual, partnership, association, corporation, business trust, legal representative, or any organized group of persons . . . acting directly or indirectly in the interest of an employer in relation to an employee and includes a public agency, but does not include any labor organization (other than when acting as an employer) or anyone acting in the capacity of officer or agent of such labor organization.” 29 U.S.C. sec. 203 (a),(d).
2 Employers are NOT required to send a Marketplace Notice to retirees and COBRA participants. In addition, there is no requirement to provide a separate Marketplace Notice to spouses or children.
Employers also are required to provide the Marketplace Notice to all newly hired employees (those hired after the date the Marketplace Notice is distributed to current employees) at the time of hire, but in no event, no later than 14 days from the date of hire.
The Marketplace Notice must be provided to employees in writing and in an understandable manner. The Marketplace Notice may be provided by first-class U.S. mail or electronically, pursuant to the Department of Labor’s electronic disclosure safe harbor regulations.
Required Content of Marketplace Notice
The Marketplace Notice must include the following information:
- That the Marketplace exists. This includes a description of the services provided by the Marketplace, and the manner in which the employee may contact the Marketplace to request assistance;
- That the employee may, under certain circumstances, be eligible for a premium tax credit if the employee purchases a qualified health plan through the Marketplace; and
- That the employee may lose the employer’s contribution to his or her health plan if the employee purchases a health plan through the Marketplace, and that a portion of that contribution may be excludible from income for tax purposes.
For employers who do provide healthcare coverage to some or all of their employees, the Marketplace Notice also must include the following additional information:
- Plan eligibility requirements for employees and dependents:
- A statement indicating whether the plan is intended to be “affordable” as defined in the Affordable Care Act; and
- An indication of whether the plan is a minimum value plan within the meaning of the Affordable Care Act, i.e. a plan that pays at least 60% of the benefits that are covered by the plan.
Department of Labor Model Marketplace Notice
The Department of Labor has provided model notices for employers to use to satisfy the notice requirement. These model notices can be found on the DOL website at:
- Model Notice for employers that offer health coverage to their employees: http://www.dol.gov/ebsa/pdf/FLSAwithplans.pdf.
- Model Notice for employers that do not offer health coverage to their employees: http://www.dol.gov/ebsa/pdf/FLSAwithoutplans.pdf.
Please note that employers that offer health coverage and choose to use the Model Notice will need to create three versions of the notice and provide them to the following groups of employees (this is because the Model Notice requires specific information about each employee’s eligibility for coverage):
- Notice to all currently eligible employees
- Notice to all employees who are in their waiting period with their effective date noted
- Notice to all employees who are not eligible for coverage.
On September 11, 2013, the Department of Labor confirmed that there are no penalties for failure to provide the Marketplace Notice. However, employers should consider other potential consequences of failing to provide the Marketplace Notice, including failure by plan sponsors that are subject to ERISA to comply with the fiduciary obligation to provide required information to participants.
This Law Watch is part of KKAL’s ongoing, proactive efforts to educate employers regarding the many intricacies of the Affordable Care Act. We invite your comments and questions regarding the issue addressed in this Law Watch, or any other components of the Affordable Care Act.
We hope you find this issue of KKAL’s Labor and Employment Law Watch helpful and informative. Please understand that the Law Watch is designed to provide information about current developments and required actions. If you have any questions regarding any labor and employment law matter, including the issues discussed in this newsletter, please do not hesitate to contact us at 717-392-1100, or email us at the following addresses:
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