After U.S. employers have taken care of the new health care benefit cost-reporting requirement for 2012 W-2s (due to employees in January 2013), their attention should turn to an upcoming deadline to notify employees about the availability of state health insurance exchanges.
Currently, March 1, 2013, is the mandated deadline for employers to notify employees about state-specific exchanges to be set up on their behalf by state governments or the federal government by 2014. Many expect that the exchange notification deadline will be extended, however, the U.S. Department of Labor (DOL) hasn’t yet released proposed regulations or indicated whether it will provide a model notice.
“No matter what deadline the DOL ultimately sets, employers need to be prepared to include this in their communication plans for 2013,” recommended Jennifer Benz, CEO of consultancy Benz Communications, in a news release.
Specifically, Benz noted that employers will be required to communicate three items of information, for which they can find the necessary language in section 1512 of the Patient Protection and Affordable Care Act (PPACA):
State exchange basics: This is a description of the state exchange, the services provided by the exchange and how to contact the exchange (website and customer service number). One wrinkle: not all states have decided how they’re going to comply (the National Conference of State Legislatures provides an up-to-date chart of state implementation efforts). Employers in multi-plan states will have an even more challenging time.
Individual plan value: This explains whether employees will receive at least 60 percent coverage of essential health benefits through employer-provided coverage, and whether employees may be eligible for a premium tax credit if they purchase a plan on the state exchange.
Tax implications: Because health insurance premiums under employer-sponsored coverage may be paid with pre-tax dollars, buying coverage through a state exchange may change an employee’s tax obligations. Employees using an exchange to purchase coverage may lose their employer’s tax-free contribution (if any) to their health coverage, also.
While the particulars of the state exchanges are still unknown, Benz is hopeful that there will be a simple, streamlined way to communicate the required notice to employees, and she suggested planning ahead to integrate the notice into an overall health benefits communications strategy.
“Communicate your 2014 position before the legalese does,” Benz advised. “Be sure to use language that fits the notice into your big picture approach to health care reform compliance. For many employers, this strategy is going to include high-deductible health plans and incentive-heavy wellness programs, two benefit strategies that require robust, thoughtful communications in their own right,” she noted in the news release.
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