Employer Deadline for Notification of Health Care Exchanges Approaching

As a reminder, the Patient Protection and Affordable Care Act (commonly referred to as “Obamacare”) requires most employers to provide each of their employees a written “Exchange Notice” on or before October 1, 2013. The purpose of the Exchange Notice is to inform employees of the existence of government-run health exchanges, also known as the “Health Insurance Marketplace”, where health insurance can be obtained.

The notification requirement applies to most employers that have $500,000 or more in annual revenue. If the requirement applies to your company, the Exchange Notice must be provided to all employees regardless of plan-enrollment status or eligibility and regardless of whether the employee is part-time or full-time status. In addition, the Exchange Notice must be provided to all new employees hired after October 1, 2013.

The Department of Labor has issued model notices for use by employers. One notice is provided for use by employers that offer a health plan to some or all employees, and a second notice is available for employers that do not offer a health plan.

The notice for employers that offer a health plan is available at: http://www.dol.gov/ebsa/pdf/FLSAwithplans.pdf.

The notice for employers that do not offer a health plan is available at: http://www.dol.gov/ebsa/pdf/FLSAwithoutplans.pdf.

We also recommend that you include a cover letter explaining why the notice is being provided. A cover letter is not required, but it may reduce the number of employees who contact you to inquire about the purpose of the Exchange Notice.

The Exchange Notice can be distributed electronically, by first class mail or by hand delivery, although it is recommended that you obtain a signed receipt or other confirmation from the employee for any hand delivered Exchange Notices.

© 2013 Parsonage Vandenack Williams LLC

For more information, contact info@pvwlaw.com

Supreme Court Upholds Individual Mandate

The Supreme Court has upheld the constitutionality of PPACA in a 5-4 ruling issued today.  The Supreme Court determined the individual insurance mandate was not unconstitutional under the Tax Clause of the Constitution.

A key provision of PPACA was deemed unconstitutional.  Under the Act as originally drafted, the Secretary of Health and Human Services would have had the power to withdraw all Medicaid payments from any state that failed to comply with the expanded Medicaid requirements under the Act.  The Supreme Court held that this provision is unconstitutional.  As a result, the Secretary of Health and Human Services may only withhold funds disbursed under PPACA if a state chooses to participate in the program and fails to comply with its provisions.

The Supreme Court’s ruling underscores the importance of planning for the implementation of PPACA.  Several key provisions of the Act take effect in 2013.  These provisions include Medicare tax increases for individuals earning more than $200,000 per year and married persons filing jointly  earning more than $250,000 per year.  The Act also imposes a $2,500 cap on employee health flexible spending account contributions.  Beginning in 2013, employers will no longer be eligible to take a deduction for providing retiree prescription drug coverage.

Additionally, the comparative effectiveness research fee for employers sponsoring group health plans will increase in 2013.  Employers were previously required to pay a $1 fee for each participant in a sponsored group health plan.  That fee will now double in 2013, and will afterward be indexed to national health expenditures.  Employers will also be subject to additional notification requirements regarding exchange programs.  For example, employers in participating states will be required to provide employees with information about options they may have if the employer’s coverage is not affordable.  In light of the major effects that PPACA will have on group health plans and other related policies, it is crucial for employers to review these plans and policies to make sure that they comply with PPACA provisions coming into force in 2013.

Stay tuned for future blogs and articles about the PPACA once the entire opinion can be digested…

© 2012 Parsonage Vandenack Williams LLC

For more information, contact info@pvwlaw.com