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Monday, September 9, 2013

As most group health plan administrators are well aware, the Marketplace Notice (i.e., notice of coverage options) is required to be distributed to existing employees  by no later than October 1, 2013.

As discussed in our previous Client Alert  and blog entry, the DOL issued model notices and guidance regarding which employers must comply with this requirement, which employees must receive the notice and the notice’s required content.  Links to the models are available on BenefitsBryanCave.com.  A more thorough discussion of  employer’s notice obligation is provided in our Client Alert which can be accessed here. Until last week, one open question was whether an employer could satisfy its obligations to provide the Marketplace Notice by engaging another entity (such as an insurer, multiemployer plan, or third-party administrator) to send the Marketplace Notice on its behalf.

In its Sixteenth set of PPACA-related FAQs issued on September 4th, the DOL confirmed that the answer is “yes”.  Specifically, the DOL opined that an employer will have satisfied its obligation to provide the notice  if another party provides a timely and complete notice.  This is welcomed news for employers that contract with another party to generally send participant communications and/or annual open enrollment materials. (Stay tuned for our annual “Check it Out and Check it Off” client alert detailing annual notice requirement that employers should continue during open enrollment).

Note, however, that the FAQ contains a cautionary reminder that all employees must receive the notice, regardless of whether they are enrolled in the employer’s group health plan and, further, that an employer is not relieved of its obligation to provide notice if another entity sends the notice to only participants enrolled in the plan. To that end, an employer relying on another part to send its notice should inquire whether that party will provide notice only to a subset of employees (e.g., employees enrolled in the plan).

Finally, employers should not forget that COBRA election notices need to be updated to reflect the DOL’s earlier guidance that those electing continuation coverage may want to consider and compare health coverage alternatives to COBRA that are available through the Marketplace.

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