ACA Update: Deadline for Providing Exchange Notice Delayed

04 February 2013 Publication
Author(s): Leigh C. Riley

Legal News Alert: Employee Benefits & Executive Compensation

The U.S. Department of Labor (DOL) recently announced that it would delay the March 1, 2013 deadline for delivery of the employer-provided notice of health insurance exchanges (Exchanges) to employees. The announcement was included in a new set of FAQs jointly released by the DOL and the U.S. Departments of Health and Human Services and Treasury.

Employer-Provided Exchange Notice Requirement

The Patient Protection and Affordable Care Act (ACA) amended the Fair Labor Standards Act to require employers to provide a written notice to current employees by March 1, 2013 (or at the time of hire for new employees) with information about the Exchanges. Specifically, the notice must include the following:

  1. A statement about the existence of the Exchanges, a description of the services provided by the Exchanges, and contact information for the Exchanges
  2. An explanation of the circumstances under which an employee may be eligible for a premium tax credit through the Exchanges
  3. An explanation that, if the employee purchases a qualified health plan through an Exchange, the employee may lose a tax-free employer contribution to an employer-provided health plan


When and How Must Employers Comply With the Exchange Notice Requirement?

Citing a number of factors, the DOL delayed the March 1, 2013 deadline for providing the notice until regulations implementing the notice requirement are issued later in 2013. The DOL expects that the new deadline will be in the late summer or fall of 2013, which will coordinate with the open enrollment period for the Exchanges.

The DOL may provide a model notice, or may allow employers to meet the notice requirement through use of an employer coverage template discussed in recently proposed regulations addressing eligibility and enrollment in the Exchanges. The template will be available for download on the Exchange Web sites and will include information about the employer’s health coverage that will be used in determining an employee’s eligibility for premium tax credits through the Exchanges.

Employers should stay tuned for future guidance from the DOL announcing the deadline and providing additional clarification on complying with the notice requirement.

Legal News Alert is part of our ongoing commitment to providing up-to-the-minute information about pressing concerns or industry issues affecting our clients and our colleagues. If you have any questions about this update or would like to discuss this topic further, please contact your Foley attorney or the following:

Kaley M. Connelly
Milwaukee, Wisconsin

Leigh C. Riley
Milwaukee, Wisconsin

Internal Revenue Service regulations generally require that, for purposes of avoiding United States federal tax penalties, a taxpayer may only rely on formal written opinions meeting specific requirements described in those regulations. This newsletter does not meet those requirements. To the extent this newsletter contains written information relating to United States federal tax issues, the written information is not intended or written to be used, and a taxpayer cannot use it, for the purpose of avoiding United States federal tax penalties, and it was not written to support the promotion or marketing of any transaction or matter discussed in the newsletter.

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