Tuesday, September 24, 2013

ACA Employer Update: Health care notices to employees due October 1st.

There has been a lot in the news about the Affordable Care Act (ACA), employer responsibilities, the Health Exchange and even more information that is confusing or not available yet.  Generally, employers with fewer than 50 full-time equivalent employees are not required to offer employee health coverage under the ACA.  However, small businesses that have even one employee and over $500,000 annual sales are required to notify your employees of exchange programs and provide notices to all employees.

By October 1, 2013, every employer (with at least one employee and over $500,000 annual sales) must provide each employee* with a "Notice of Exchange", or a notice of the availability of health insurance exchanges. *See explanation of employee in next section.

Notices must be emailed or mailed.
One is for those employers that DO provide their employees a group medical plan.

The other is for those that DO NOT provide a group medical plan.

Visit the Department of Labor website for the full ruling and downloadable Word documents of the above letters if you prefer.

Who do employers have to send it to?  

All employers have to provide this to each employee* on their payroll, regardless of hours, regardless of whether they are even eligible for the group plan.  This includes part-time, temporary or seasonal employees.  Again, anyone on payroll, with the exception of COBRA members or retirees.  New hires should be provided the notice within 14 days of hire.

How are employers required to provide the ACA notice to employees?  

Letters due by October 1st!
Employers will have to either mail it or e-mail it.  If mailing, it can be sent via First Class mail.  If e-mailing, you can only e-mail it to employees who have a work e-mail address and who are expected to use the computer at work as part of their normal work duties (for all others, you'll have to use snail-mail). 

Note: Per the requirement, handing the notices out does NOT meet the requirement. 

What does the notice need to say?

According to FindLaw's Betty Wang, notices should include:

  • notification that the exchange exists;
  • a description of the services provided by the exchange;
  • information on how to contact the exchange to request assistance;
  • the employee’s potential eligibility for subsidized coverage on the exchange if your company’s group health plan doesn’t provide “minimum value,”; and
  • the fact that the employee may lose the employer contribution (if any) toward health insurance coverage if he or she chooses to purchase individual coverage on the exchange. FindLaw Blog (September 10, 2013)

Are there more requirements?

If you offer an employer-sponsored health plan, you are probably already familiar with the Summary and Benefits Coverage (SBC) requirements, which state health plans must:
  • Provide a short, easy-to-understand summary of the key features of every plan — including the coverage options available, the benefits provided, cost-sharing rules, and coverage limitations and exceptions.  Click here for a  blank sample and a completed sample.
  • Attach a glossary of terms commonly associated with health insurance, such as “deductible” and “co-pay.”  Here is a sample SBC Glossary.

In Washington State, the Exchange is located online at the Washington Health Plan Finder. Beware of look-alike websites that are operated by insurance companies; start with the Washington Insurance Commissioner's office or make sure the site states that it is the official ACA-compliant health benefit exchange for the state of Washington. 

Navigating the ACA and DOL websites can be tricky.  The SBA is offering a series of free webinars for employers to learn more and if you need assistance, please do not hesitate to call your insurance agent or SBDC advisor.