Beginning January 1, 2014, individuals and employees of small businesses will have access to health coverage through a health insurance market (known as an "Exchange" or "Marketplace") in their state. Open enrollment for the Marketplace begins October 1, 2013. The Affordable Care Act (ACA) requires employers to provide employees with a notice of their coverage options available through the Marketplace ("Exchange" or "Marketplace" Notice).
On May 8, 2013, the U.S. Department of Labor (DOL) issued providing two model Marketplace Notices (one for employers that provide health coverage, and another for employers that do not provide health coverage) and clarifying questions about the Notice requirement, such as when and how to provide the Notice. The Technical Release also includes a revised model COBRA election notice, which now includes information about coverage through the Marketplace. For additional information on the notice requirements, click here.
Exchange or Marketplace Notice
The Marketplace Notice must be provided by employers that are subject to the Fair Labor Standards Act (FLSA). In general, the FLSA applies to employers that employ one or more employees who are engaged in, or provide goods for, interstate commerce. For most firms, a test of not less than $500,000 in annual dollar volume of business applies. The DOL provides an to help employers determine whether they are subject to the FLSA. If an employer is subject to the FLSA, it must provide a Marketplace Notice regardless whether it is a large employer subject to the play-or-pay mandate or whether it offers grandfathered or non-grandfathered health coverage (or no coverage at all).
The Marketplace Notice must be distributed to all employees, regardless of their enrollment status or their part-time or full-time status. Spouses and dependents are not required to receive a separate Notice. The Marketplace Notice must inform the employee:
- of the existence of the Marketplace, including a description of the services provided by the Marketplace and contact information for the Marketplace;
- that the employee may be eligible for a premium tax credit if the employee purchases a qualified health plan through the Marketplace; and
- that if the employee purchases coverage through the Marketplace, the employee may lose any employer contribution to a health plan offered by the employer, and all or a portion of such contribution may be excludible from income for federal income tax purposes.