The Patient Protection and Affordable Care Act (“ACA”) created a new section of the Fair Labor Standards Act (“FLSA”) that requires employers to provide employees with notice of coverage options in the Health Insurance Marketplace, i.e., what plans are available and what they cost. (The “Marketplace” is what was previously referred to as the “Exchange.”) Originally, the deadline for the notice was March 1. The Employee Benefits Security Administration of the Department of Labor (“DOL”) released temporary guidance on May 8, 2013, regarding the notice requirement as well as model notices that many employers have long been awaiting.
According to the guidance, employers are required to provide notice to new employees at the time of their hire starting on October 1. In 2014, as long as the employer provides the notice within 14 days of the employee’s start date, the notice will be considered timely. Employers must also provide this notice to current employees no later than October 1, 2013. This October 1 deadline is meant to coincide with the open enrollment period for the Marketplace.
The notice must include:
- information regarding the existence of a health insurance exchange, including a description of the exchange’s services and the manner in which the employee may contact exchanges to request assistance;
- a statement that if the employer’s plan pays less than 60% of the covered benefits, the employee may be eligible for premium tax credits if the employee purchases coverage through the exchange; and
- a warning that the employee might lose the employer contribution toward the cost of health coverage, including the tax favorable treatment of the employer’s contribution, if the employee purchases coverage through an exchange, and all or a portion of such contribution may be excludable from income for federal income tax purposes.
Employers that are subject to the FLSA (which is almost all employers in America) are subject to this notice requirement. Employers should not wait to prepare for compliance these notice requirements and should review the model notices issued by the DOL.
Brody and Associates regularly advises management on complying with the latest state and federal employment laws. If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.965.0560.
