Health Insurance Marketplace Exchange Notice Deadline 10/1/2013


Exchange Notice

In its May 8, 2013 technical release (2013-02), the U.S. Department of Labor (DOL) provided employers with temporary guidance regarding the notice requirement to all employees of their right to purchase health insurance coverage through the respective state Health Insurance Marketplace.  The guidance requires that employers provide the notice to all employees by no later than October 1, 2013 (or for newly hired employees, within 14 days of the employee’s start date).  The notice must be in writing and in a manner that can be understood by all employees.  In addition, it must be provided free of charge via first class mail or electronically if the DOL’s electronic disclosure safe harbors are met.   The notice should:

  • Inform the employee  of the existence of the Marketplace (referred to in the statute as “Exchange”) including a description of the services provided by the Marketplace, and the manner in which the employee may contact the marketplace to request assistance;
  • If the employer plan’s share of the total allowed costs of benefits provided under the plan is less than 60% of such costs, that the employee may be eligible for a premium tax credit under section 36B of the Internal Revenue Code (the “Code”) if the employee purchases a qualified health plan through the Marketplace; and
  • If the employee purchases a qualified health plan through the Marketplace, the employee may lose the employer contribution (if any) to any health benefits plan offered by the employer and that all or a portion of such contribution may be excludable from income for federal income tax purposes.

The DOL has provided model language that can be used to satisfy the notice requirements.  They have issued two examples: one for employers who do not offer a health plan, and one for employers who offer a health plan to some or all employees.

COBRA Notice

COBRA provides that 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 or other loss of coverage).  These individuals are referred to as beneficiaries, and the group health plan must provide qualified beneficiaries an election notice within 14 days of the plan administrator’s notification of a qualifying event.

Qualified beneficiaries may also want to consider other health coverage alternatives that are available to them through the marketplace and should know that they may be eligible for a premium tax credit for a plan through the Marketplace.

The DOL has provided model language that can be used to satisfy the notice requirements to make qualified beneficiaries aware of other coverage options available to them through the Marketplace.

If you have any additional questions please contact Feeley & Driscoll by Email or call us at 1 (888) 875-9770.

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