PPACA (ObamaCare): Important Information for Employers

Since its signing by President Obama, there has been much debate about the Patient Protection and Affordable Care Act (PPACA). As we approach many of the important dates, much of the conversation has turned to the opening of the Exchanges and Employer’s responsibilities. Below are some Commonly Asked Questions.

Q. What is the Exchange Notice?

A. PPACA requires employers to provide new hires and current employees written notice about health coverage options that are available through the public exchanges. That notice must also advise of the potential consequences should the employee choose to purchase a qualified health plan on the Exchange in lieu of participating in an available employer sponsored coverage.

Q. What is the purpose of the Exchange Notice?

A. The purpose of the Exchange Notice is to make sure employees understand the trade-offs when an employee gives up employer-sponsored health coverage and purchases a qualified health plan via an exchange.

Q. Which employers are required to provide the Exchange Notice?

A. Employers that are subject to the Fair Labor Standards Act must provide the Exchange Notice to its employees.

Q. Are employers required to provide the Exchange Notices by a certain date?

A. Yes. The notices must be automatically provided free of charge to all current employees by October 1, 2013.

Q. When must the Exchange Notice be provided to employees hired after October 1, 2013?

A. For employees hired after October 1, 2013, the Exchange Notice must be provided to the employee within 14 days of the employee’s start date.

Q. Which employees must receive the Exchange Notice?

A. Every employee regardless of whether the employee is enrolled in the employer-sponsored health plan and regardless of whether the employee is full-time or part-time.

Q. Is there a required manner by which the Exchange Notice must be given?

A. The notice must be in writing and in a manner calculated to be understood by the average employee.

Overview of Exchange Notices

Q. How should the Exchange Notice be distributed?

A. The Exchange Notice may be sent to employees by first class mail or electronically so long as the Department of Labor electronic disclosure safe harbor (29CFR2520.104(b)-1(c)) is met.

Q. What content is required to be in the Exchange Notice?

A. The Department of Labor has issued model notices that an employer can use to meet the Exchange Notice requirements. (See “free downloads” below for more information and forms.)

The Exchange Notice must:

1. Inform the employee of the existence of the public exchange,

2. Provide a description of the services provided by the Exchange,

3. Provide information on how to contact the Exchange for assistance,

4. Inform the employee that he/she may be eligible for a premium tax credit or

cost sharing reduction through the Exchange if the employer-sponsored plan’s

share of the total cost of benefits is less than 60%, and

5. Inform the employee that:

a. If a qualified health plan is purchased through the Exchange, the

employee may lose any employer contribution toward the cost of the

employer-provided health coverage,

b. That all or a portion of the employer contribution to the employer provided

coverage may be excludable for the employee’s taxable income

for federal income tax purposes, and

c. The employee may or may not be eligible for the premium tax credit.

FREE Downloads:

HealthCare Reform Timeline Chart

Health Insurance Coverage Notification BLANK

Health Insurance Marketplaces Form