Employer ACA Exchange Notice Requirement Delayed

Written by: PeopleKeep Team
Originally published on January 17, 2013. Last updated July 7, 2015.

According to the Affordable Care Act (ACA), starting March 1, 2013, employers must inform all current employees and any new hires after this date about the existence of the exchange in their state and how employees can access it. The notification must include:

  1. Written notice informing employees about the state’s Exchange.

  2. Notification to employees if the plan offered by the employer is inadequate, meaning it does not meet the actuarial value of 60 percent. 

  3. Notification to employees that if they purchase a health plan through the Exchange, the employee may lose the employer’s contribution to health benefits offered by the employer.

The notice must be provided regardless of the size of the employer and include minimal information about the individual so as not to place a threat to individual privacy.

The DOL has not yet issued a model notice, FAQs or guidance about the employer notice requirement. 

exchange notification

Exchange Notice Requirement Delayed

Due to the lack of information available to employers regarding specific state health insurance exchanges, the Department of Labor (DOL) has annouced that employers will not be held to the March 1, 2013 deadline. According to the email, the Department acknowledged that it would be premature to issue a notice in March because specific exchange information is not yet available and the upcoming guidance on the provision is expected to reflect a more realistic compliance date.

When do employers have to comply with the new exchange notice requirements?

The Department of Labor has concluded that the notice requirement under FLSA section 18B will not take effect on March 1, 2013 for several reasons. First, this notice should be coordinated with HHS's educational efforts and Internal Revenue Service (IRS) guidance on minimum value. Second, we are committed to a smooth implementation process including providing employers with sufficient time to comply and selecting an applicability date that ensures that employees receive the information at a meaningful time. The Department of Labor expects that the timing for distribution of notices will be the late summer or fall of 2013, which will coordinate with the open enrollment period for Exchanges.

The Department of Labor is considering providing model, generic language that could be used to satisfy the notice requirement. As a compliance alternative, the Department of Labor is also considering allowing employers to satisfy the notice requirement by providing employees with information using the employer coverage template as discussed in the preamble to the Proposed Rule on Medicaid, Children's Health Insurance Programs, and Exchanges: Essential Health Benefits in Alternative Benefit Plans, Eligibility Notices, Fair Hearing and Appeal Processes for Medicaid and Exchange Eligibility Appeals and Other Provisions Related to Eligibility and Enrollment for Exchanges, Medicaid and CHIP, and Medicaid Premiums and Cost Sharing (78 FR 4594, at 4641), which will be available for download at the Exchange web site as part of the streamlined application that will be used by the Exchange, Medicaid, and CHIP. Future guidance on complying with the notice requirement under FLSA section 18B is expected to provide flexibility and adequate time to comply.

Additional Resources Regarding the Employer ACA Notice Requirement

Originally published on January 17, 2013. Last updated July 7, 2015.


Additional Resources

View All Resources