Don’t Put Off Sending the Exchange Notice


Although the federal government recently announced there are no penalties or fines for non-compliance, the failure to send the notice is not without potential consequences. That’s because under ERISA, an employee may be able to recover actual damages sustained as a result of failure to receive information required under law. If an employee could prove that the failure to receive the exchange notice resulted in actual harm, the employer could be liable for such damages. Suppose an employee is not eligible for coverage under the employer’s plan and remains uninsured next year despite the fact she would have been eligible for a significant premium subsidy had she signed up for insurance on the public exchange. If the employee could prove that she would have gotten coverage on the exchange had her employer given notice about the availability of such assistance as required by statute, her employer might be liable for any out-of-pocket uninsured medical claims incurred by the employee in 2014 or beyond. Such costs can add up very quickly. While it’s not entirely clear that such a claim would ultimately prove successful in court, the easiest way to avoid such a lawsuit is by sending out the notice this fall.

If you have any questions about the exchange notice, or about compliance with the employer mandate provisions under the Affordable Care Act (a.k.a Obamacare), please call us.