Employers have to notify workers by Oct. 1 about the new health insurance marketplace the federal government is creating under the Affordable Care Act, where individuals who qualify will get federal subsides to help them buy coverage.
Experts said many employers are unaware that federal law requires them to either mail or email notices about the marketplace, which is supposed to go live Oct. 1. On that date, individuals can go to healthcare.gov and find out how much health insurance plans cost and whether they qualify for a subsidy.
The government said it won’t impose penalties on employers who don’t fail to meet the Oct. 1 deadline to send out the notice — and some experts said the lack of a penalty may result in less compliance.
John Sarno, president of the Employers Association of New Jersey, said he has been keeping his more than 1,000 members aware of the Oct. 1 notice requirement, and nearly all his members offer health insurance.
“About half of the small employers in New Jersey don’t offer health insurance, and most of the uninsured work for a small employer that don’t offer insurance,” Sarno said. “Obviously, those small employers need to be giving this notice to their workers, because these workers need health care. Yet small employers are the least likely to give the notice, either because there is no penalty or they are just simply misinformed.”
Attorney Anu Gogna, of Day Pitney, said employers have to provide this notice to all their employees — full time, part time and seasonal — regardless of whether they are eligible for the company’s health plan.
He urged employers to get the notice out to employees. Gogna said workers need to know whether a federally subsidized health plan from the marketplace is a better deal than their employer’s plan.
“Employees need to make an informed decision about whether they want to enroll in their employer plan or go on the (marketplace) and see what is better for them,” Gogna said. Although there’s no penalty, “that does not mean the employer should not comply, because there are other potential risks with not sending out the notice,” he said.
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Suppose the employer’s plan is very expensive, and the employee could get a better deal on the marketplace. In such a case, “You don’t want those employees coming back later and saying, ‘Hey, you didn’t send me this notice, I enrolled in your plan, it’s more expensive, and I didn’t know I had the option’ ” to buy subsidized coverage, Gogna said.
The result might be litigation from employees who missed out on a chance to get affordable coverage on the marketplace.
Gogna said failure to notify could mean adverse consequences to the employees — if they wind up without coverage, they may have to pay a penalty for not complying with the ACA, which requires most Americans to get health coverage by 2014.
“You don’t want employees coming back later and saying ‘if I had known I could have gone on the” marketplace, he said.
Christine Stearns, vice president of health and legal affairs at the New Jersey Business & Industry Association, said, “For the most part, small-business owners are as confused as the general public about the ACA. Many employers are just becoming aware of their obligations, including the notice requirement.”
She advises employers “to comply and not let the lack of penalties be misunderstood.” Compliance is “the wise course to avoid the risk of being vulnerable to litigation or penalties down the road.”