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DOL Issues Model PPACA Exchange Notices and COBRA Notices

May 31, 2013

On May 8, 2013, the U.S. Department of Labor (DOL) issued temporary guidance and model notices that must be distributed to full-time and part-time employees about the health insurance Exchange under the Patient Protection and Affordable Care Act (“PPACA”).  In addition, the DOL issued an updated COBRA model election notice that contains information about the Exchange.

  • PPACA Exchange Notices

Under the PPACA, employers must provide each employee at the time of hiring, a written notice concerning  the following: (1) the existence of the health insurance Exchange including a description of the services provided by the Exchange, and the manner in which the employee may contact the Exchange to request assistance; (2) the employee may be eligible for a premium tax credit if the employee purchases a qualified health plan through the Exchange; and (3) the employee may lose the employer contribution (if any) to any health benefits plan offered by the employer if the employee purchases insurance on the Exchange.   

The temporary guidance discusses what the DOL will consider to be compliance with this requirement.  Specifically, employers must provide a notice of coverage options to each employee, regardless of plan enrollment status or of part-time or full-time status.  Employers are not required to provide a notice to dependents or other individuals who are or may become eligible for coverage under the plan but who are not employees.  Employers are required to provide the notice to each new employee at the time of hiring beginning October 1, 2013.  For employees who are current employees before October 1, 2013, employers are required to provide the notice not later than October 1, 2013.   The DOL will consider a notice to be provided at the time of hiring if the notice is provided within 14 days of an employee’s start date.  The notice must be provided automatically, free of charge.  To satisfy the content requirements, the DOL has provided model notices: one model for employers that do not offer a health plan and another model for employers that offer a health plan for some or all employees. 

  • Model COBRA Notices

The DOL has also issued revised model COBRA election forms.  The forms are intended to advise employees of their options for health insurance coverage available through the Exchange.  Under COBRA, an individual who was covered by a group health plan may be able to elect COBRA continuation coverage upon a qualifying event such as termination of employment or reduction in hours.  Notice must be provided to those individuals within 14 days after the plan administrator receives the notice of a qualifying event.  Use of the model election notice, appropriately completed, will be considered by the DOL to be good faith compliance with the election notice content requirements of COBRA.