Notice of Exchange Due By March 1, 2013

November 7, 2012

This is part of our series of alerts intended to help guide employers and plan sponsors through their new obligations under the health care reform laws and related guidance. The health care reform laws amended the Fair Labor Standards Act (FLSA) to require employers to provide their employees with a written notice (Notice) about the State Health Exchanges (State Exchange) and to explain some of the benefits and consequences to employees if they choose to purchase a qualified health plan through the State Exchange instead of electing coverage under an employer-sponsored health plan. This Notice must be provided by March 1, 2013. Although we expect model notices to be provided, none have been issued to-date. 

What must be provided in the Notice?

The written Notice must provide information:

When must the Notice be provided to employees?

The Notice must be provided to each current employee by no later than March 1, 2013, regardless of the plan year for the employer’s group health plan. For new employees hired on or following March 1, 2013, the Notice must be provided on their respective date of hire. We are still awaiting guidance on acceptable delivery methods other than mailing the notice in paper form. We expect that future guidance will allow employers to issue the Notice electronically in accordance with existing DOL guidelines governing electronic disclosure.

Which employers are required to provide Notices to their employees?

The FLSA defines “employer” very broadly. Under the FLSA, “employer” means “any person acting directly or indirectly in the interest of an employer in relation to an employee.” Unless you have reason to believe you are exempt from the FLSA, you should assume that you must provide your employees with the Notice.      

Print PDF