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Regulation and Compliance > State Regulation

Will feds stick to PPACA notice deadline?

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One provision in the Patient Protection and Affordable Care Act that has been little-noticed up until now will require employers to let employees know about the state exchange system by March 1, 2013.

The PPACA exchange notice provision will require employers to give all new hires and current employees with a written notice telling the employees about the existence of the exchange program, according to the text of PPACA.

Employers must also inform the employees that employees might be eligible for a premium tax credit or a discount on health coverage cost-sharing provisions even if the employer offers a health plan but the health plan fails to meet PPACA group coverage standards.

The employers also must tell the employees that employees who buy their own coverage through the exchange system, rather than sticking with the group plan, will lose access to employer contributions toward the cost of coverage.

“Sources within the [Obama] administration have begun indicating that the effective date will probably be delayed,” according to the HR Policy Association, a group for chief human resource officers. 

The U.S. Department of Health and Human Services (HHS) and the U.S. Labor Department have not yet published exchange notice guidelines, and HHS is still in the process of determining which states might try to offer their own exchanges, which might work with HHS to start exchanges, and which might depend on HHS to provide exchange services. 

Sara Collins and Tracy Garber of the Commonwealth Fund are reporting that 18 states and the District of Columbia are hoping to run a state-run exchange in 2014. In addition to the District of Columbia, those jurisdictions are California, Colorado, Connecticut, Hawaii, Idaho, Kentucky, Maryland, Massachusetts, Minnesota, Mississippi, Nevada, New Mexico, New York, Oregon, Rhode Island, Vermont, Utah, and Washington.

States that want to run their own exchanges were supposed to let HHS know by Dec. 14.

States have more time to say whether they will run partnership exchanges. The states that appear to be planning to operate partnership exchanges are Arkansas, Delaware, Illinois, Iowa, North Carolina, and West Virginia, according to Collins and Garber.

Some states that want to run their own state exchanges, such as California and Maryland, have already hired major exchange system vendors, but others are still developing requests for proposals.

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