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On May 8, 2013, the U.S. Department of Labor (DOL) provided temporary guidance about the soon-to-launch Obamacare exchanges. According to the guidance, employers must provide notice about the exchanges to current and all newly hired employees starting no later than Oct. 1, 2013 (“Exchange Notice”).

DOL also announced an updated model election notice that plans must provide to inform departing employees about continued health care coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA) (“COBRA Notice”).

Model Exchange Notice Issued - Model language for the Exchange Notice is available at http://www.dol.gov/ebsa/healthreform/index.html. There is one model Exchange Notice for employers that offer a health plan to some or all employees and another model Exchange Notice for employers that do not offer a health plan. Employers may use one of these models or a modified version, provided the notice satisfies certain requirements. The notice must be provided to each and every employee without exception. Employers are not required to provide a separate notice to dependents or other individuals who are or may become eligible for coverage under the plan but who are not employees.

Timing of Exchange Notice - Beginning Oct. 1, 2013, the guidance requires employers to provide the exchange notice to each new employee at the time of hiring. For 2014, the DOL will consider a notice to have been timely delivered if it is provided within 14 days of an employee’s start date.

Model COBRA Notice Revised - DOL revised the Model COBRA Notice to inform qualified beneficiaries of coverage options available through government-run health care exchanges under Obamacare. The COBRA Notice is available in modifiable electronic form at http://www.dol.gov/ebsa/cobra.html.

Commentary – Although the DOL guidance "requires" the issuance of the Notices, some question whether the DOL has the authority to issue such guidance without issuing appropriate regulations. In any event, DOL has admitted that there is no penalty for failing to issue the Notices.

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