Exchange Notice Requirement – Marketplace Notice to New Hires

The Affordable Care Act (ACA) requires employers to provide all new employees with a written notice about the Health Insurance Marketplace (Exchange). The intent of the notice is to inform employees about the availability of coverage through the Marketplace and how it may affect their eligibility for premium tax credits.

• California’s Health Insurance Marketplace (Exchange) is called Covered California.
• Nevada’s Health Insurance Marketplace (Exchange) is called Nevada Health Link.

This requirement applies to all employers subject to the Fair Labor Standards Act (FLSA) – not just Applicable Large Employers (ALEs). In practice, this includes most employers in the U.S.

Key Requirements

• Who Must Receive It:
  • All new employees, regardless of full-time or part-time status, whether or not they are eligible for employer-sponsored coverage.
• Timing:
  • Must be provided within 14 days of the employee’s start date.
• Content:
  • The notice must inform employees:
    • About the existence of the Marketplace, including services provided and how to contact it.
    • That they may be eligible for a premium tax credit if the employer plan does not meet affordability or minimum value standards.
    • That purchasing coverage through the Marketplace may affect their eligibility for employer contributions toward coverage.
• Format:
  • The U.S. Department of Labor (DOL) provides model notices that employers can use to meet this requirement:
    • Model Notice for Employers Who Offer Coverage
    • Model Notice for Employers Who Do Not Offer Coverage
• Delivery:
  • May be distributed by first-class mail or electronically, consistent with DOL electronic disclosure rules.
• Non-Compliance:
  • Although there is no specific penalty for failing to provide the Marketplace notice, it is a legal requirement, and providing it helps employees make informed decisions about their coverage options. It also demonstrates strong compliance efforts, especially during audits or disputes.

Practical Tips

• Automate the Process: Incorporate the Marketplace notice into new hire onboarding packets to ensure compliance.
• Don’t Miss the 14-Day Window: The timing requirement applies even if an employee won’t be eligible for coverage until later.
• Use the Model Notice: It’s the easiest way to ensure all required information is included and up to date.
• Keep It Updated: Check periodically for DOL updates to the model notice.