Date: Oct 01, 2013
Magazine:
October 2013 -- Wellness Program: Company-wide Exercise Plan Reaps Benefits

WG Compliance Counsel

 

Dear Jon:

 

I’ve been hearing so much about the health insurance exchanges and Covered California, but what exactly is an exchange and does it affect me as an employer?

 

— Puzzled in Pajaro

 

Dear Puzzled:

 

A health insurance exchange is, in essence, an online marketplace where individuals and businesses (small businesses under 50 employees) will be able to shop for health insurance beginning October 1, 2013.

As part of health care reform, states were given a number of options regarding health insurance exchanges.  A state could:

 

  • Sponsor its own exchange
  • Allow the federal government to operate an exchange in the state; or
  • Partner with the federal government and share the tasks associated with operating an exchange

 

A majority of states, for example, Arizona, chose the second option and will allow the federal government to operate the exchange.  These federal health insurance exchanges are called the “Marketplace.”  A minority of states, including California, have chosen to operate their own state health insurance exchanges.  California calls its exchange, “Covered California” and its web address is http://www.coveredca.com.  If you live in California, you have probably already seen advertising for Covered California since open enrollment is set to begin October 1, 2013.

As an employer, how does a health insurance exchange affect you?

All employers will be required to coordinate with the exchange and provide information about the type of coverage (if any) that you offer to your employees. 

Employers subject to the Fair Labor Standards Act (that is, employers with at least 1 employee and $500,000 in annual business volume) were instructed to provide a model notice to employees about the health insurance exchanges.  The notice was to be provided by October 1, 2013, to existing employees and to new employees within 14 days of their hire date thereafter.  The Department of Labor, on September 11, 2013, stated that failure to provide an exchange notice, however, will not result in any monetary penalty.  Crafted by the federal government, the model notices contain some basic information about the exchanges.

There are two versions; one notice is for employers that provide a health benefit plan to some or all employees, and a second notice is for employers that do not offer health care coverage.  Visit www.wgat.com/exchange-notice to download forms.  The notice for employers that provide a health plan contains fields that require you to describe the health benefits you offer your employees, including eligibility requirements, cost of the plan, and whether the plan meets minimum value.

Here’s the reason for the background information on the model health insurance exchange notices.  If your employees choose to apply for health coverage at an exchange, they will be asked for this same information as part of the application on a form called, the “Employer Coverage Tool.”  To ease your administrative burden, you may want to complete the “Employer Coverage Tool” and have it available for your employees, as they will request this information from you in order to complete their health insurance exchange application.

The “Employer Coverage Tool” is available online.

 

(Editor’s Note: Dear Jon is a WG&S series devoted to answering all your health-care related questions.  As we continue to move into uncertain waters, Western Growers Compliance Counsel Jonathan D. Alexander is here to help.  Specializing in Health Care Reform, all things PPACA and more, Jon will answer your questions however small or big they seem.  To submit your question, write dearjon@wga.com.)

WG Staff Contact

Jonathan Alexander
Vice President & PCMI Compliance
949-885-2330

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