One of the provisions of the Affordable Care Act (“ACA” or “Obamacare”) requires employers to provide ALL employees with a notice about the health insurance exchanges. This year’s deadline is October 1st.
The notice must inform employees of three essentials:
- Health insurance exchanges exist on federal and state levels (as applicable).
- Employees may be able to obtain tax credits by purchasing health insurance from an exchange if there is no employer-sponsored plan, if it covers less than 60% of total allowed benefit costs or if the particular employee is ineligible for the employer-sponsored plan.
- Employees whose employers provides health insurance that meets the 60% threshold should not purchase plans through an exchange. Doing so could cause them to lose employer-sponsored coverage and associated tax advantages.
The provisions for the notice include:
- May be provided in writing or electronically. Electronic notices must meet certain guidelines.
- Must be provided automatically without employees having to request it or opt in.
- Must be written in plain, readily-understood language.
- Must be free of charge to employees.
- Must be provided to all employees – full-time and part-time, regardless of whether or not they participate in the employer-sponsored health insurance plan.
The U.S. Department of Labor has issued preliminary guidelines for the ACA Exchange Notice, including two models:
Your AKM CPA is ready to assist you with any questions and to help you ensure compliance. As with all such requirements, there is a penalty for failure to comply.