By Mick Constantinou, Advisor, Employee Benefits
Connelly, Carlisle, Fields, & Nichols, A UBA Partner Firm
A recent UBA blog outlined some compelling reasons why some employers are proceeding with the 10/1 exchange notices despite the postponement of the penalty. For those who are doing that, we’ve uncovered some glaring issues with the questions in the model Exchange Notices recently released by the Department of Labor.
In preparation for a recent seminar on health care reform, my colleague, benefit advisor Justin Treece contacted the DOL to clarify these issues.
Part A (page one) of the notice is essentially a Q&A/marketing piece about the exchanges. Part B (pages two and three) of the version for employers that currently offer group health insurance requires the employer to provide information about the health coverage offered to employees.
What happened to questions #1 and #2?
The Part B section of the notice begins with question #3 (Employer Name) and not #1. In its current version, there is no question #1 or #2 anywhere on the form. So the mystery begins.
When Justin contacted the DOL to be sure we were downloading the correct version, the DOL representative’s response was, “Well, that’s weird.”
The DOL representative did confirm that this was the right form and that employers should proceed and ignore the incorrect numbering.
The form instructions state, “This information is numbered to correspond to the Marketplace application.” Upon review of the current draft of the Exchange Application, Appendix A on page 9 and 10 of the 12-page application provides the tie to the Exchange Notice. Question #1 is “Employee name” and Question #2 is “Employee Social Security number” on both pages. The remaining questions 3 – 16 match the Exchange Notice. Mystery solved.
Can you explain the check box on Part B? Should I check the box?
On the same Part B page, the employer is advised as follows about a check box:
“If checked, this coverage meets the minimum value standard, and the cost of this coverage to you is intended to be affordable, based on employee wages.”
Considering that Minimum Value Plans have not been released for employer small groups, and many employers have non-calendar year renewals, how would it be possible for a small group employer to check this box as part of the October 1, 2013 notice?
When asked the question by Justin, the DOL representative did not quite understand. Justin clarified, stating that generally speaking, all employers with a current group health insurance plan do not currently have a Minimum Value Plan.
When the DOL representative asked Justin if he wanted to change the form, Justin indicated that while this would be the most logical action, Justin doubted he had the authority to make such a change. The DOL representative confirmed Justin’s doubt and suggested that Justin speak to Health and Human Services (HHS) or local politician.
So what should employers do?
While it is not completely clear on how employers should be completing Part B of the Exchange Notice, one benefits attorney has suggested that if it is the employer’s intention to offer Minimum Value Plans and make them affordable at their 2014 renewal, the employer should check the box to indicate this. It has also been recommended to leave questions 13-16 blank since they are optional and could potentially add confusion to the employer/employee communication regarding the exchanges. UBA has an expanded FAQ that provides additional detail on the notices and filling out the form.