For those who have taken the time to read through the model exchange notices recently released by the U.S. Department of Labor you may have noticed some glaring issues with the questions.
By way of review, 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.
I had a chance to talk with Mick Constantinou and Justin Treece from Connelly, Carlisle, Fields & Nichols who contacted the DOL to clarify a number of questions regarding the three-page exchange notification due to be sent out by employers on Oct. 1. Here’s what we found out:
Thom: What happened to questions #1 and #2?
Mick: 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 my colleague, 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 we should advise employers to 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.
Thom: Should advisers tell employers to check the box on the Part B page?
Mick: 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 Oct. 1 notice?
When Justin asked the question, 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 or a local politician.
Thom: So what do we make of all this confusion and how do we go forward?
Mick: While it is not completely clear 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.
Mangan is an EBA Advisory Board member and CEO of United Benefit Advisors, an independent employee benefits advisory organization with more than 270 offices throughout the U.S., Canada and the U.K.
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