Model Exchange Notice

March 2017

On September 11, 2013 in its online FAQ1, the Department of Labor confirmed the fact that currently there will be no penalties for employers surrounding a failure to issue Marketplace Notices2 (also known as “Notice of Exchange Coverage”) to employees. Some may have interpreted the new FAQ statement as being new guidance. In fact, the absence of penalties under the ACA surrounding the Exchange Notices, is not news, and has been a known under Fair Labor Standards Act (FLSA) §18b.

Employers subject to FLSA are still required to distribute a Marketplace Notice to all current employees by October 1, 2013, and new hires going forward.

As precautionary and to be completely clear: despite the fact that there is no statutory penalty, there could be ERISA fiduciary issues under case law related to the failure to communicate to participants in the absence of the employer communication. In general, employers that sponsor ERISA plans have a duty to be straightforward with participants. Therefore, we recommend that you comply with this requirement and we would not advise that an employer could safely disregard this obligation.

To learn more about the impact of this and other decisions on employee benefit plans, please visit Peel & Holland University. We have posted a document entitled Model Exchange Notice.

Peel & Holland continues to monitor progress of the health care reform developments for workplace wellness programs and will keep you informed of important updates.

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