Vermont’s health care exchange is scheduled to go live Oct. 1, and businesses have until then to give their workers a heads up about what it means for them.
The federal Affordable Care Act requires that employees in Vermont be notified in writing by Oct. 1 about Vermont Health Connect, the state’s soon-to-be-unveiled online marketplace for health insurance. The requirement only applies to employers subject to the federal Fair Labor Standards Act.
The notification must include at least three things:
• Where to find Vermont Health Connect and how to get help signing up for health care under the new system;
• How or when a tax credit may be available to the employee;
• What happens — for example to tax credits and employer contributions — if the employee chooses insurance through the exchange instead of through the employer.
What’s not required is what employees likely are most curious about: Whether their employers plan to offer health insurance in 2014, and what that plan may look like. The notice simply is aimed at informing employees of current practices, with an option to specify what’s to come.
There is no penalty for missing the Oct. 1 notice deadline, but the U.S. Department of Labor is considering establishing one, according to Lindsey Tucker of Vermont Health Connect.
Robin Lunge, director of health care reform for the Shumlin administration, underscored that the Oct. 1 notice is a federal requirement — not one imposed by the state. That’s a distinction also made by Betsy Bishop, president of the Vermont Chamber of Commerce. The chamber is the state’s largest statewide “navigator” for small businesses, according to its website. The organization administers an insurance program for about 4,500 employers and 18,000 people, Bishop said.
“No other state is mandating that every individual and employer (with 50 or fewer employees) must go into the exchange,” Bishop said. The Oct. 1 notice is a very simple task, therefore, in most other states, where exchanges are less likely to change the way employers offer health insurance. “That’s not the case here in Vermont,” Bishop said.
Neither federal nor state deadlines require employers to choose what type of coverage, if any, they’ll offer come Jan. 1. But Bishop said her organization has been encouraging employers to think of Oct. 1 as a deadline to make that decision, because the Oct. 1 notification is bound to spur more questions than it answers for employees.
“If I were an employer … I would like to send out that notification with more information,” Bishop said, such as whether the employer will continue to offer health care plans or if any current insurance benefits will be dropped.
Bishop said the chamber and its related navigation organization has encouraged businesses to make those decisions now, so that when the exchange opens Oct. 1, company representatives can go straight into the portal to list their eligible employees and specify the plans and employer contributions being offered.
“That will leave employees two or more months to do their parts,” Bishop said.
On the other hand, the longer employers wait, the less time workers will have to evaluate their options and choose between work-based plans or coverage directly through Vermont Health Connect.
By Jan. 1, all individuals and small businesses must be enrolled in the state exchange. Common sense — and the reality that insurance processing takes time — therefore point to late November as a deadline for employers to make their 2014 plans known.
The companies subject to the federal Fair Labor Standards Act are, generally speaking, those that engage in interstate commerce and/or claims annual sales or receipts of $500,000 or more. Schools, hospitals and government agencies also must comply. An FLSA “adviser” on the U.S. Department of Labor website can help employers determine if their enterprises fall into the applicable categories, or if any employees fall under FLSA exemptions.
Lunge said that while Vermont Health Connect staff and navigators will do their best to help employers determine the applicability of FLSA requirements, the federally required Oct. 1 letter is outside the state’s bailiwick.
To assist with small business communications, the Vermont Chamber developed sample notification letters in early September, after it learned of the requirement from Blue Cross Blue Shield of Vermont, Bishop said. The sample letters — one for employers that currently offer a health care plan, and one for employers that don’t — can be found on the Vermont Chamber of Commerce navigator Web page and at healthconnect.vermont.gov/notices.