By Jerry Geisel, Crain News Service
WASHINGTON (Jan. 28, 2013) — Federal regulators have delayed indefinitely a healthcare reform law requirement that employers notify employees in writing by March 1 about the availability of public health insurance exchanges.
In a set of frequently asked questions and answers jointly issued Jan. 24 by the Departments of Health and Human Services, Labor and Treasury, regulators said the reporting requirement will not go into effect until regulations are issued and "become applicable."
Regulators cited several reasons for delaying the March 1 reporting requirement, including the intent to set a date that would give employers more time and to coordinate more closely with exchanges' open enrollment.
"We are committed to a smooth implementation process including providing employers with sufficient time to comply and selecting an applicability date that ensures that employees receive the information at a meaningful time," regulators said in the FAQs.
Regulators now expect that the notices will be distributed in late summer or fall, which would coordinate with the Oct. 1 starting date for the exchanges' open enrollment.
Regulators also said they are considering providing "model, generic language" that employers could use.
Benefit experts welcomed the delay, which had been expected.
Employers "were concerned about this very imminent deadline. Coordinating the notice with fall open enrollment should also help employers effectively meet this notice requirement," said Rich Stover, a principal with Buck Consultants L.L.C. in Secaucus, N.J.
Public insurance exchanges will be available to employees whose employers do not provide coverage or provide unaffordable coverage. Regulators previously said coverage is not affordable when an employee's share of the premium for self-only coverage exceeds 9.5 percent of his or her wages. Exchanges also will be available to small employers.
The biggest use of exchanges will be by the lower-income uninsured—those whose incomes are up to 400 percent of the federal poverty level. Those individuals will be eligible for federal subsidies to offset premiums they will have to pay for coverage—in some cases, completely—depending on their income.
So far, 17 states and the District of Columbia have received conditional approval from HHS to offer exchanges, while partnership agreements have been approved for two states, Arkansas and Delaware, in which the states will assume certain exchange functions.
Several additional states are expected to have partnership agreements approved. In more than two dozen other states, the federal government will operate the exchanges.
This report appeared in Business Insurance magazine, a Chicago-based sister publication of Tire Business.