As expected, the government issued guidance (in the form of frequently asked questions posted on the Department of Labor’s website) postponing the due date for employers to issue notices regarding the availability of health coverage under state exchanges.
Under the 2010 health care reform law, a provision added to the Fair Labor Standards Act requires employers to provide employees with notices – by March 1, 2013 – regarding the availability of health coverage under state-based exchanges and how to obtain more information. In addition to general availability and contact information for state exchange coverage, the employer notice must include a statement regarding an employee’s potential eligibility for federal subsidy to buy exchange coverage, if the employer’s coverage (if any) fails to meet a “minimum value” test. The notice also must contain a statement regarding the loss of any employer contribution toward the cost of coverage (which is nontaxable) if employees opt for exchange coverage instead of employer coverage.
Because meaningful guidance has not yet been issued on how to determine whether an employer plan meets the minimum value test and because the information about most of the exchanges is not yet available, the government is delaying compliance with the notice requirement until late summer or early fall. The government is considering providing a template notice for employers to use. Stay tuned!