TONY WILSON: Employers must notify workers of new insurance options

Tony Wilson

Tony Wilson

While the employer coverage mandate of the health care reform law has been delayed until 2015, there is one employer requirement that remains in place for 2013: Exchange Notices.

Under the Patient Protection and Affordable Care Act (PPACA), employers — whether they offer health insurance coverage or not — are required to notify their full- and part-time employees of the Health Insurance Exchange by Oct. 1.

Over the next couple of weeks, we will explore the Exchanges in detail, but briefly the Exchange is a website platform (www.healthcare.gov) where individuals and families can purchase health insurance coverage from carriers that participate in the program.

To help facilitate this requirement, the U.S. Department of Labor has published two model notices on its website (www.dol.gov/ebsa/healthreform). One is for employers that offer health insurance coverage while the other notice is specific to those employers that do not offer health insurance coverage.

The model notices address several things for employees, including explaining what the Exchange (also referred to as a “Marketplace”) is, and how having, or not having, employer-sponsored coverage can impact the person looking to the Exchange for coverage.

All employers must complete the notice with their contact information, and employers that offer health insurance coverage also must include some basic plan information on the notice.

The first round of notices must be delivered to employees by Oct.1. For employees hired after Oct. 1, employers have 14 days from the employee’s date of hire to deliver the notice.

PPACA is very specific with how the notice is to be delivered: first-class mail or electronic delivery. Hand delivery of the notice or including it in an employee’s enrollment packet is not technically an acceptable form of delivery under the law.

However, the DOL recently commented that hand delivery may be an acceptable manner of distribution if the employer is able to ensure that each employee receives a copy of the notice.

The DOL’s comment is based on informal discussions; it is not binding guidance and cannot be relied upon to protect an employer from audit. If you want to proceed with confidence, I would advise using first-class mail or electronic delivery. If you opt for hand delivery make sure each employee signs a log sheet that they received the notice.

First class mail delivery is straightforward enough. Though not required, I would encourage employers to include a cover letter with the notice explaining the reason for the notice. Keep copies of each cover letter mailed.

Electronic delivery requires a few more steps. The law provides that the notice can be sent via email to employees who have electronic access as an integral part of their job. The employer must take the necessary steps to ensure that the email system “results in actual receipt of transmitted information” (which would be satisfied by return receipts or failure to deliver notices).

The electronic delivery mechanism must: protect the employee’s confidential information, maintain the required style/format/content requirements, include a statement as to the significance of the document and provide a statement as to the right to request a paper version of the notice.

If the employee does not have electronic access as an integral part of his or her job, the employee may provide the employer with an email address, along with consent, to provide the notice.

The email must explain: what document will be provided electronically, that the employee’s consent can be withdrawn at any time, the procedure for withdrawing consent and changing the email address, the right to request a paper copy of the document and if there is an applicable fee and what hardware or software will be needed.

Next week, we will begin our detailed look at the Health Insurance Exchange.

Questions or comments? Feel free to email me at twilson@nfp.com.

Tony L. Wilson is a principal with NUVISION Financial Corporation based in Conyers, NUVISION is a subsidiary of National Financial Partners Corp., an industry leader in the delivery of benefits solutions for companies of all sizes.