Skip to main content

Exchange Notice Requirements Delayed

The Affordable Care Act (ACA) requires employers to provide all new hires and current employees with a written notice about ACA’s Health Insurance Exchanges, effective March 1, 2013.

On January 24, 2013, the U.S. Department of Labor (DOL) announced that employers will not be held to the March 1, 2013 deadline. They will not have to comply until final regulations are issued and a final effective date is specified.

This HANYS Benefit Services Legislative Brief details the expected timeline for the Exchange notice requirements.


Exchange Notice Requirements

In general, the notice must:
  • inform employees about the existence of the Exchange and describe the services provided by the Exchange; 
  • explain how employees may be eligible for a premium tax credit or a cost-sharing reduction if the employer's plan does not meet certain requirements; 
  •  inform employees that if they purchase coverage through the Exchange, they may lose any employer contribution toward the cost of employer-provided coverage, and that all or a portion of this employer contribution may be excludable for federal income tax purposes; and 
  •  include contact information for the Exchange and an explanation of appeal rights. 

This requirement is found in Section 18B of the Fair Labor Standards Act (FLSA), which was created by ACA. DOL has not yet issued a model notice or regulations about the employer notice requirement.

When do Employers have to Comply with the Exchange Notice Requirements?

Section 18B provides that employer compliance with the notice requirements must be carried out "[i]n accordance with regulations promulgated by the Secretary [of Labor]." Accordingly, DOL has announced that, until regulations are issued and become applicable, employers are not required to comply with the Exchange notice requirements.

DOL concluded that the notice requirement will not take effect on March 1, 2013, for several reasons. First, this notice should be coordinated with the U.S. Department of Health and Human Services’ (HHS) educational efforts and Internal Revenue Service guidance on minimum value. Second, DOL is 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. 
DOL 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.

DOL is considering providing model, generic language that could be used to satisfy the notice requirement. As a compliance alternative, DOL 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.

Future guidance on complying with the notice requirement under FLSA Section 18B is expected to provide flexibility and adequate time to comply.

Source: U.S. Department of Labor

This HANYS Benefit Services Legislative Brief is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.

Design © 2013 Zywave, Inc. All rights reserved.

Popular posts from this blog

COVID-19: Retirement and Benefit Plan Resources

As the COVID-19 crisis continues to unfold, we are closely monitoring news and updates from top sources. We’ll be updating this section as new developments unfold. Here are several key articles and links to help plan sponsors and administrators navigate the COVID-19 impact to retirement and benefit plans: Retirement Plans 4 Key CARES Act Provisions for Retirement Plan Sponsors Markets React to Coronavirus   Important Considerations for Retirement Plan Sponsors during the Coronavirus Pandemic In Fed We Trust Participant Education Services: Timely Help from a Safe Distance CRDs 100% Taxable for New York State and Local Income Tax Purposes in 2020 IRS Permits Remote Notarization of Participant Elections   Employee Benefits CARES Act Expands Health Coverage Rules Understanding the Historic $2 Trillion Stimulus Package Employee Compensation and Benefits During Closures and Furloughs DOL Clarifies Exemptions to Coronavirus Paid Leave Laws Small Business Exemption to

Coronavirus-related distributions 100% taxable for New York state and local income tax purposes in 2020

The Coronavirus Aid, Relief and Economic Security (CARES) Act was signed into law on March 27. Under the Act, participants affected by the coronavirus may be able to take distributions in 2020 of up to $100,000 from an employer-sponsored retirement plan or an IRA. Although allowing these distributions from a qualified retirement plan is optional, we have seen that a number of employers have chosen to amend their plans to permit such distributions. The Act provides that coronavirus-related distributions will not be subject to the mandatory 20% withholding nor the 10% early withdrawal penalty (for those younger than 59½) that would otherwise apply.

HANYS Benefit Services names Noah Buck president

Buck brings 20 years of retirement and benefits industry experience to leadership role of boutique advisory agency  Rensselaer, NY July 14, 2022— HANYS Benefit Services announced today Noah Buck has been appointed president. Buck steps into the advisory agency’s leadership role at a time when organizations are seeking expert retirement and employee benefits guidance for fiduciary governance and employee engagement. With HBS since 2019, Buck had most recently served as interim president and was previously vice president of client relationship management. Before joining HBS, Buck was a principal in Milliman’s employee benefits practice. He earned a Bachelor of Science in management science and information systems from Penn State University and a Master of Business Administration from SUNY Albany. "I’m honored to be leading a team that is passionate about making sure our clients are meeting their organization’s and employees’ needs,” said Buck. “A focused approach to retirement and