The Affordable Care Act (ACA) deadline for sending the Notice of Marketplace Coverage Options to employees coincides with the Health Insurance Marketplace open enrollment period that also begins on October 1, 2013. The notice must provide a written description of the services provided by the Marketplace and meet the following requirements:
Explain how the employee may be eligible for a premium tax credit (subsidy) if he or she does not have access to affordable coverage and purchases qualified coverage through the Marketplace.
Inform employees that if they purchase health coverage through a Marketplace, they will lose any employer premium contributions towards the cost of employer-sponsored coverage, and that all or a portion of those employer contributions to employer-sponsored coverage may be excludable from the employee’s income for federal income tax purposes.
Include contact information for customer service resources within the exchange and an explanation of the appeal rights.
Employers must provide the Notice of Marketplace Coverage to all current full-time and part-time employees – regardless of their enrollment status under existing group plans. For employees hired on and after October 1, 2013, the notice of Marketplace Coverage Options must be provided within 14 days of hire. The notice may be provided either by first-class mail or electronically, if the requirements of the DOL's electronic disclosure requirements are met.
Part B of the form is the Employer Certification of Coverage, which is used to confirm that all full-time employees were offered coverage. This certification will be used to enforce the individual mandate. Employers will need to complete Part B prior to distribution. Because these documents reference 2014 contributions, these documents will need to be revised once your 2014 contribution strategy has been determined.
Employees of Massachusetts employers with 11 or more full-time equivalent employees who are ineligible for employer-sponsored group health plan coverage (e.g. part-time or other ineligible class) must be offered access to this individual market coverage using pre-tax contributions under their employer’s Internal Revenue Code (“Code”) Section 125 cafeteria plan. This is done by setting up a payroll deduction that lets workers make a health insurance premium payment with pre-tax dollars.
Employers that fail to adopt a cafeteria plan that conforms to the requirements of both the Code and Massachusetts law are subject to a free-rider surcharge (please reference Pinnacle Compliance Update 9/4/13). Massachusetts employers must also notify employees that this pre-tax option is available. The Massachusetts Health Connector just released a Massachusetts-specific template that includes the required language. However, for Massachusetts employers with employees outside of Massachusetts, the requirement to use two notices (MA and non-MA) will cause an additional burden.
Pinnacle Financial Group has eliminated this burden by modifying the federal notice to include language that meets the Massachusetts Section 125 plan notice requirement. We have attached our revised Notice of Marketplace Coverage Options (you can reference this sample document when completing the forms). Employers may use this model or a modified version, provided the notice meets the content requirements described above.
As a reminder, a revised Model COBRA Election Notice is now available for group health plans to inform eligible employees and dependents of the right to continuation of coverage under federal law and of how to make an election when a qualifying event occurs. The updated model notice includes information regarding coverage alternatives that will be available through the new Marketplaces. The revised notice also describes the availability of premium tax credits for purchasing coverage through the Exchange. Employers should update their COBRA communications with these notices. For those of you working with a COBRA administrator, they will be responsible for sending out the new Election Notices as qualifying events occur.
While news headlines may give the impression of a slowing of Obamacare implementation, many deadlines remain unchanged; nor have the penalties that go with them. Make sure you're up to date with your compliance efforts. Don't hesitate to contact us with any questions. Additionally, you can also easily access health care reform-related resources, schedules and insights through our client portal, the Client Resource Center. (If you're not sure of your Client Resource Center password, just take a second to click here and request it.)