October 1, 2013 is the deadline for virtually all U.S. employers to notify all of their employees (including part-time employees) of the availability of state health insurance “marketplaces,” or exchanges. The notification requirement, under the Patient Protection and Affordable Care Act (“ACA”), is unrelated to the so-called “employer mandate” that will require large employers to offer insurance to their employees beginning January 1, 2015, or pay penalties.
The notice must be provided in writing -- electronic delivery is permitted, if certain requirements are met -- and must inform employees of coverage options, a description of the services provided by the state exchange, and contact information. The notice must inform employees that if they purchase insurance through the exchange, they may be eligible for a premium tax credit, but may lose the employer contribution (if any) to any health benefits plan offered by the employer. The notice must also point out that all or a portion of the employer’s contribution may be excludable from the employee’s income for federal income tax purposes, whereas the cost of insurance purchased through the exchange will be paid for with after-tax dollars.
The U.S. Department of Labor has provided two model notices on its website, one form for employers that provide health insurance to their employees and another for employers that do not, which will satisfy the ACA requirement. Employers may customize the model notices, which contain some information that the ACA does not specifically require.