The Department of Labor (“DOL”) has issued exchange notices and an updated COBRA election notice.
Exchange (“Marketplace”) Notice
What is this?
The exchange notice provides employees with certain information related to the new Marketplaces (the state or federally operated exchanges) which are expected to begin open enrollment on October 1, 2013 and begin covering individuals on January 1, 2014. Two separate model notices are now available – one notice for employers who offer a health plan to some or all employees and another model notice for employers who do not offer a health plan to employees. The exchange notice must be provided to all current employees (regardless of plan enrollment status or part-time or full-time status), as well as to new hires. Employers are not required to provide a separate notice to dependents or other individuals who are or may become eligible for coverage under the plan but who are not employees.
When does this need to be sent?
The exchange notice was originally required to be sent to employees in March of 2013. That deadline was delayed pending further guidance that was expected to be released in late summer or early fall. Instead, the DOL provided guidance before the summer (in May). Employers are now required to provide this written notice to each current employee no later than October 1, 2013, and to each new employee at the time of hiring beginning on and after October 1, 2013(within 14 days of an employee’s start date).
The model exchange notices can be found here:
Revised COBRA Election Notice
The revised model COBRA Election Notice makes it clear that employees will have a choice between COBRA coverage and exchange (marketplace) coverage. COBRA qualified beneficiaries who will lose coverage in a group health plan as a result of a qualifying event (such as termination of employment or reduction in hours) can elect COBRA continuation coverage or the marketplace. The updated model notice includes additional information for COBRA qualified beneficiaries who may want to consider and compare COBRA to the health insurance alternatives that will be available through the marketplaces. The revised notice also describes the availability of premium tax credits for coverage purchased through the marketplaces.
The election notice must be provided to COBRA qualified beneficiaries within 14 days after the plan administrator receives the notice of a COBRA qualifying event. As with the earlier COBRA election notice models, the plan administrator must complete a portion of the model notice by filling in the blanks with the appropriate plan information.
The revised model COBRA election notice can be found here: http://www.dol.gov/ebsa/modelelectionnotice.doc
What Should I Do Next?
- For the exchange notice, employers should prepare to distribute the exchange notice to all employees before October 1, 2013. Since open enrollment for the exchanges is scheduled to begin on October 1, 2013, we would recommend sending this notice at least one to two months before the deadline (sometime between August 1, 2013 and September 1, 2013). The notices may be delivered electronically in accordance with the DOL safe harbor.
- For the COBRA election notice, employer should prepare to use the new model notice for any COBRA qualifying events moving forward.
If you have any additional questions regarding the information within this eCommunication, please call Corporate Synergies at 1.866.CSG.1719 or CLICK HERE to contact us today.