No Exchange Notice, No Problem: DOL Says “No Penalty for Failing to Provide the Notice”

The Department of Labor said in an FAQ on Wednesday (September 11th) that “there will be no fine or penalty for failing to provide the notice to your employees.” The news brings a little relief for employers scrambling to distribute the mandated Exchange Notice to their employees by October 1st.

To be clear, the mandate to deliver the Exchange Notice to your employees is still in place. There just won’t be a penalty for employers failing to provide employees with the notice.

In case you didn’t know …

The Affordable Care Act (ACA) requires all employers that are subject to the Fair Labor Standards Act (FLSA) to provide a written notice to their new and current employees about the Exchanges.

The notice should inform employees:

•  About the Exchange
• That they may be able to get lower-cost private insurance in the Exchange
• That they may lose the employer contribution (if any) to their health benefits if they buy insurance through the Exchange.

The DOL has issued two model notices to help employers comply. There is one model for employers that do not offer a health plan and another model for employers that offer a health plan for some or all employees:

• 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

We covered the Exchange Notice in detail on our blog earlier in the week.

You should still provide an Exchange Notice to your employees

Although the DOL says there will be no penalties for not providing an Exchange Notice, we think you should still provide the Exchange Notice to your employees. Here’s why:

It’s a great opportunity to educate your employees on what the exchange is. 

The vast majority of Americans still have no clue what the Health Insurance Marketplaces are, what they do, or even how to use one.  The Exchange Notice is not meant to be a burden on employers (even though it may seem that way), its purpose is to help your employees understand the new options that may be available to them. Use the Exchange Notice to start the education process and your employees will thank you.

Go above and beyond the Exchange Notice by providing them with a personalized cover letter (from you) that explains why they’re receiving the notice.