State Health Insurance Exchanges
California was the first state to create a health insurance exchange, which has been named Covered California. The purpose of state exchanges, including Covered California, is to provide a market for access to health insurance for the uninsured and small employers. However, the Exchange will also offer plans to employees who may have employer-sponsored coverage, but qualify for Federal subsidies based on their family income and the affordability of their employer premiums. Employees who receive Federal subsidies may only use them to purchase health insurance from the Exchange. Most employers with fifty (50) or more full-time employees will be subject to monetary penalties if their employees obtain their coverage from the Exchange instead of the employer plan.
Will You Pay or Play?
There are complex considerations for employers whether to “play” (continue providing employer-sponsored “minimum essential” coverage that is “affordable”) or to “pay” (have employees obtain health insurance from the Exchange and incur the penalties). The decision making process involves many factors – from costs to employee relations – that require careful analysis of the options based on data about your workforce.
March 1st 2013 Employee Notice Requirement
As of January 24, 2013 the Department of Labor has suspended enforcement of Section 18B of the Fair Labor Standards Act (FLSA). This was the requirement that plan sponsors must provide all employees information about their state exchange and the availability of Federal subsidies by March 1, 2013. The new enforcement date has not been decided upon yet.
|Glocal Insurance Services is not a law firm and no opinion, suggestion, or recommendation of the firm or its employees shall constitute legal advice. Clients are advised to consult with their own attorney for a determination of their legal rights, responsibilities and liabilities, including the interpretation of any statute or regulation, or its application to the clients’ business activities.