Written by: Gene G. Smith, CPA

On May 8, 2013, the Department of Labor (DOL) released published Technical Release No. 2013-02, guidance about the notice (Notice) that most employers nationwide must provide to their employees no later than October 1, 2013, under the Patient Protection and Affordable Care Act (PPACA or ACA). The Notice describes the health insurance that will be available through health care marketplaces established by the ACA, known as “Exchanges.”

Model Notices (Templates) for Employers to Use

DOL has created model notices that employers can use to meet the Exchange Notice requirement:

Model Notice for employers that offer a health plan to some or all employees


Model Notice for employers that do not offer a health plan to any employees


Notice Timing and Delivery

Under the ACA, employers must notify all employees about the new health care exchanges (now being called “Marketplaces.”) This notification requirement applies whether or not employees are covered in the employer’s health plan (if any), and whether they are full-time or part-time employees.

Employers must provide the Notice to all current employees no later than October 1, 2013. For employees hired after October 1, 2013, employers must provide the Notice to new employees within 14 days of an employee’s start date. Employers are not required to provide a separate Notice to dependents or other individuals who are or may become eligible for coverage under the health plan but who are not employees.

How Employees May Be Notified

DOL offers flexibility in how employers may notify their employees about the Exchanges (“Marketplaces”). Employers can choose any of three notification methods:

1. Employers may hand-deliver the Notice to each employee.

2. Employers may mail the notice via first-class U.S. Mail to each employee.

3. Employers may deliver the notice electronically to each employee, but must satisfy DOL’s safe harbor requirements below.

Please note: Merely posting a disclosure Notice on the employer’s website so it is available to employees will not by itself satisfy this disclosure requirement. E-mailing the Notice directly to each employee is the safest way to assure compliance with the safe harbor guidelines for electronic distribution.

The DOL’s electronic delivery safe harbor is undergoing review and may become more flexible in the future.

Electronic safe harbor: The Exchange Notice may be provided electronically if the requirements of the DOL’s electronic disclosure safe harbor described in labor regulations (29 CFR 2520.104b-1(c)) are satisfied. Generally, this safe harbor allows disclosure through electronic media to employees:

• Who have the ability to effectively access documents furnished in electronic form at any location where the employee is reasonably expected to perform duties; or

• For whom access to the employer’s electronic information system is an integral part of those duties.

Consequences of Failure to Deliver the Exchange Notice

It is unclear what the consequences are for failure to deliver the Notice. However, an employer failing to deliver the Notice would be violating the FLSA and the ACA, and may be subject to investigation and penalties. Employees complaining about not receiving the Notice (or reporting the violation) would have employment protections under the ACA.