21 Aug Don’t forget about employee ACA communication due Oct. 1

Originally posted by Keith R. McMurdy August 16, 2013 on https://eba.benefitnews.com

With the recent employer mandate delay, some businesses might be overlooking the requirement to provide a notice to employees about health insurance coverage that may be available through a public exchange.

Employers must provide a notice to each employee, regardless of plan enrollment status or part-time or full-time status, by Oct. 1. The notice must be provided automatically, free of charge, and written in language that the average employee can understand. It may be provided by first class mail or electronically, if the requirements of the U.S. Department of Labor’s electronic disclosures safe harbor are met. It must also be provided to new hires — for 2014, the DOL will consider a notice delivered timely to a new employee if it’s provided within 14 days of the start date.

The notice must inform each employee of three things:

• The existence of state or federal health insurance exchanges.
• If the employer plan’s share of the total allowed costs of benefits provided under the plan is less than 60%, then the employee may be eligible for a federal premium tax credit if the employee purchases a qualified health plan through an exchange.
• If the employee purchases a qualified health plan through an exchange, then the employee may lose the employer contribution to any health benefits plan offered by the employer; also, all or a portion of such contribution may be excludable from income for federal income tax purposes.

The good news is that employers don’t have to create the notices from scratch. The DOL published model notices, one for Employers Who Offer Health Plans, and one for Employers that Do Not Offer Health Plans. If employers have questions about how to complete the forms, this is an opportunity for an employee benefit adviser to step in and provide guidance. Above all, advisers should remind employers that they need to issue them. Just because employers have a year to wait on the coverage mandate does not mean they can ignore other compliance rules like this one.