Affordable Care Act Model Exchange Notice Issued
FLSA section 18B, added to the labor statute by the PPACA, requires employers that are subject
to the FLSA to provide to each of their employees, and to all new employees at the time of
hiring, a written notice. The notice must inform employees of the following:

The existence of the government-run health care exchanges/the Marketplace, including a
description of the services provided and the manner in which employees may contact an
exchange to request assistance.

If the employer plan’s share of the total allowed costs of benefits provided under the plan
is less than 60 percent of such costs, employees may be eligible for a premium tax credit
under section 36B of the Internal Revenue Code if they purchase a qualified health plan
through an exchange.

If employees purchase a qualified health plan through an exchange, they may lose the
employer contribution (if any) to any health benefits plan the employer offers. All or a
portion of this contribution may be excluded from income for federal income tax
purposes.
To satisfy these content requirements, model language is available on the DOL's Affordable
Care Act webpage. There is one Model Notice for employers that offer a health plan to some or
all employees and another Model Notice for those that do not offer a health plan.
Employers may use one of these models or a modified version, provided the notice meets the
content requirements described above. It must be provided to each employee, regardless of planenrollment status or part-time or full-time status. Employers are not required to provide a
separate notice to dependents or other individuals who are or may become eligible for coverage
under the plan but who are not employees.
"It is welcome news that the model notices are not state-specific or employee-specific," Buck
Consultants said in its alert. "Employers who offer different health plans to different groups of
employees, however, may need to prepare multiple notices and coordinate the distribution."
"Employers need to be prepared to include this in their communication plans,” Jennifer Benz,
CEO of consultancy Benz Communications, told SHRM Online. “Communicate your 2014
position before the legalese does,” she advised. “Be sure to use language that fits the notice into
your big picture approach to health care reform compliance."
Timing of Exchange Notice
The requirement to issue the section 18B exchange notice to current and new employees was to
take effect on March 1, 2013, but the DOL announced a delay in January (see the SHRM Online
article “Required Exchange Notifications to Employees Delayed”). At that time, the DOL said
it expected that exchange notices would be distributed in the late summer or fall of 2013, which
would coincide with the open enrollment period for the exchanges.
In the new Technical Release No. 2013-02, the agency said it had received several requests from
employers for a model notice on an earlier time frame so they could inform their employees now
about the upcoming coverage options through the exchanges.
Under the new guidance, beginning Oct. 1, 2013, employers will be required to provide the
exchange notice to each new employee at the time of hiring. For 2014, the DOL will consider a
notice to have been timely delivered if it’s provided within 14 days of an employee’s start date.
With respect to current workers, employers are required to provide the notice by Oct. 1. The
notice must be provided automatically, free of charge, and written in language that the average
employee can understand. It may be provided by first-class mail or electronically if the
requirements of the DOL's electronic disclosure safe harbor are met.
Employers may use the temporary model notice or rely on the temporary guidance prior to Oct.
1.
If you need help or assistance with human resource processes or projects or management training for
your staff, please contact Charlotte Mason, President, Advantage Resource Group, Inc. (540) 774-9705 –
[email protected] – www.Advantageresgroup.com