Reed Smith Client Alert

On May 8, the Department of Labor ("DOL") issued guidance regarding the requirement that employers provide notice to employees describing the coverage options available under Health Insurance Marketplaces (formerly known as Exchanges) ("Marketplaces"). Through Technical Release 2013-02, the DOL provided employers with temporary guidance on how to satisfy the requirement included in the Patient Protection and Affordable Care Act of 2010 (the "ACA"), as well as model notices.

Section 18B of the Fair Labor Standards Act ("FLSA"), as added by the ACA, originally required all employers to provide employees with notice of the coverage options that will be available through Marketplaces by March 1, 2013. For numerous reasons, the DOL decided to delay the effective date of the requirement until additional guidance was issued. The delayed guidance was slated for distribution in late summer or early fall 2013, in time for the January 1, 2014 rollout of Marketplaces. Now, however, to accommodate multiple requests that guidance and models be provided earlier, the DOL has issued temporary guidance through Technical Release 2013-02, as well as through model notices.

Pursuant to Technical Release 2013-02, the Marketplace notice must include information regarding:

  • The existence of Marketplaces, contact information for Marketplaces, and a description of the services that will be provided
  • Employee eligibility for a premium tax credit to help pay the cost of Marketplace coverage
  • Loss of the employer contributions for health plan coverage if the employee purchases health coverage through a Marketplace

The Marketplace notice must be provided by October 1, 2013, and thereafter, for new employees within 14 days of the date of hire. Model notices are available on One model has been designed for employers that provide group health plan coverage, and another for employers that do not.

As part of Technical Release 2013-02, the DOL has also issued a new model COBRA election notice. The new notice includes information for potential COBRA participants regarding the coverage options available through Marketplaces.

For more information regarding the new notices, or for information about Marketplaces or the ACA, please contact one of the authors listed, or your Reed Smith attorney.


Client Alert 2013-135