Employer Notifications Under Patient Protection and Affordable Care Act Postponed

New York and New Jersey employers have been given a short temporary reprieve for a major notice requirement under the Patient Protection and Affordable Care Act.

The Departments of Labor, Treasury, and Health and Human Services recently announced that the March 13, 2013 deadline for providing written notice of Health Care Exchange requirements is being moved back.

Under changes made to the Fair Labor Standards Act pursuant to the PPACA, an applicable employer must provide each employee at the time of hiring (or with respect to current employees, not later than March 1, 2013), a written notice:

• Informing the employee of the existence of exchanges including a description of the services provided by the exchanges, and the manner in which the employee may contact exchanges 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, that the employee may be eligible for a premium tax credit under section 36B of the Internal Revenue Code (the Code) if the employee purchases a qualified health plan through an exchange; and
• If the employee purchases a qualified health plan through an exchange, the employee may lose the employer contribution (if any) to any health benefits plan offered by the employer and that all or a portion of such contribution may be excludable from income for Federal income tax purposes.

However, the Department of Labor has yet to issue implementing regulations. Accordingly, it has announced that until such regulations are issued and become applicable, employers are not required to comply with the notification provisions.

Although the rollout of many provisions of the PPACA may not proceed as scheduled, they will ultimately be implemented. In this case, the DOL expects the new deadline will eventually fall within the late summer or fall of 2013, which will coordinate with the open enrollment period for exchanges. Thus, New York and New Jersey businesses should of course continue with their compliance efforts.

If you have any questions about the postponement of the Health Care Exchange notification or need compliance assistance with other provisions of the Affordable Care Act, please contact, Charles Yuen, or the Scarinci Hollenbeck attorney with whom you work.