Affordable Care Act — Update

September 05, 2013

A critical element of the Affordable Care Act (ACA) is establishment of the Health Insurance Exchange in each state. These are sometimes referred to as the state's Health Insurance Marketplace. The Exchange is intended to make insurance available to individuals who do not have access to health insurance through an employer or whose insurance through their employer does not meet certain standards in terms of coverage or affordability.

Open enrollment for health insurance coverage through states' Exchange begins October 1, 2013 for coverage starting as early as January 1, 2014. The Department of Labor (DOL) has provided two versions of the Exchange Notice which employers should distribute to their employees prior to October 1, 2013.

The notice provides employees with certain information related to the new Exchanges. Employers are required to provide this written notice to each current employee not later than October 1, 2013, and to each new employee at the time of hiring, beginning October 1, 2013. For 2014, a notice will be considered provided "at the time of hiring" if it is provided within 14 days of an employee's start date.

Employers must provide the notice to each employee (automatically and free of charge) regardless of whether the employee is full-time or part-time. Two separate notices are provided by the DOL one model notice for employers who offer a health plan to some or all employees (click HERE), and another model notice for employers who do not offer a health plan (click HERE). The notice may be provided by first-class mail or electronically. Employers do not need to provide a separate notice to dependents who are eligible for coverage but are not employees. Employers providing group health coverage are encouraged to complete the optional section of the notice (3rd page) to ensure accurate information is provided to the state Exchange.

The ACA also established the Small Business Health Options Program (SHOP), intended to give small employers with less than 50 employees more choice in selecting group health insurance for employees. Earlier this year, the Department of Health and Human Services announced a delay of one year, until 2015, the requirement that government-run health insurance exchanges offer small businesses and their employees the opportunity to select among competing plans. This means that in 2014 the exchanges that will be run fully or in part by the federal government on behalf of 33 states will offer only one SHOP plan to small businesses, rather than allowing them to pick from a range of competing options. The 17 states that have opted to run their own exchanges could choose to enact a similar delay or to implement SHOP in full for 2014.

We will continue to monitor developments in health care reform to include compliance as well as recommendations for employers on best practices for their firms. In the mean time, SESCO has recently updated "An Employer's Guide to Healthcare Reform" providing a detailed overview of what is required by the law, including a timeline indicating when different provisions are to be implemented. This white paper is available for $15.00 ($10.00 for retainer clients) and may be ordered by phone at 423-764-4127, by clicking HERE from our Online Publications store, or by email at sesco@sescomgt.com.