Under the Patient Protection and Affordable Care Act (PPACA), each state is required to create and maintain a health insurance exchange by Jan. 1, 2014. Health insurance exchanges will serve as a health insurance marketplace where individuals and small businesses may purchase health plans if there is no employer-sponsored health plan or if the employer-sponsored health plan is unaffordable or fails to offer essential health benefits.
Per the PPACA, employers covered by the Fair Labor Standards Act (FLSA) are required to provide a notice to employees about the state’s health insurance exchanges. Current employees must receive the notice in writing by March 1, 2013, and new hires must receive the notice at the time of hire. The notice may be distributed electronically or via hard copy. There is no requirement to obtain an employee’s signature; however, an employer may want to track delivery and receipt of the notice.
The notice must include the following information:
- Services provided by the exchanges.
- Contact information for the exchanges.
- Employee’s eligibility for premium tax credits or cost-sharing reductions in situations where the employer’s share of the employer-sponsored health plan is less than 60% of the total costs and the employee purchases a qualified health plan through an exchange.
- Possibility of losing employer contributions to any employer-sponsored health plans if insurance is purchased through an exchange.
- Possibility that a portion or all of an employer’s contributions to employer-sponsored health plans may be excluded from income for tax purposes.
The Department of Health and Human Services has indicated that model notices will be created; however, as of January 2013, a release date has not been announced. The Department of Labor has not yet indicated whether a model notice will be provided.
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