Affordable Care Act Deadline Approaching
June 19, 2013
Affordable Care Act Deadline Approaching: Notices to Employees about the Health Insurance Marketplace by October 1, 2013
On May 8, 2013, the Department of Labor ("DOL") issued both temporary guidance and model notices addressing the requirement that employers provide “Marketplace Notice” to all employees about the Health Insurance Marketplace (the “Exchange”). By October 1, 2013, notice must be given to all employees regardless of enrollment status or part-time or full-time status.
Which Employers Must Provide Notice?
If you are covered by the Fair Labor Standards Act (“FLSA”), this requirement applies to you. Generally, the FLSA applies to employers with sales in excess of $500,000 and which employ one or more employees who are engaged in, or produce goods, for interstate commerce. The FLSA also specifically covers: hospitals, schools, institutions of higher education; and federal, state and local government agencies. The DOL provides a tool for employers to determine whether they are subject to the FLSA that can be found here. Basically, the law covers most employers.
What is the “Model Notice”?
Employers may look to model language available here to ensure that they satisfy the requirements. There are two models available: one for employers who do not offer a health plan (here) and one for employers who offer a health plan to some or all employees (here). Employers may use these models or a modified version of these models as long as the notice meets the content requirements set out below.
What Must This Notice Include?
The Affordable Care Act (“ACA”) provides that a covered employer must provide each employee with a written notice that describes the public Marketplaces. The notice must inform employees of the following:
1. The existence of the Marketplace including a description about the services it provides and its contact information;
2. How the employees may be eligible for a premium tax credit if they purchase a qualified health plan through the Marketplace and if the employer plan’s share of the total costs of the benefits provided under the plan is less than 60%;
3. That the employee may lose employer contributions to any health benefit plan the employer offers if the employee purchases a qualified health plan through the Marketplace and that all or a portion of that employer contribution may be excludable from income for federal income tax purposes.
When and How must Employers Deliver Notice?
Employers must provide notice to new employees at the time of hiring beginning October 1, 2013. For 2014, Employers must provide notice within 14 days of the employee’s start date. Employers must provide notice to current employees no later than October 1, 2013. Notice must be provided automatically and free of charge.
Notice must be given in writing in a manner that will be understood by the average employee. It may be provided by first-class mail, or electronically only if it satisfies the DOL electronic safe harbor requirements.
Employers subject to the FLSA who do not offer insurance must also provide notice. ACA penalties for no-coverage and/or unaffordable coverage may be triggered when employees obtain subsidized coverage from the exchange/marketplace and the employer is a large employer subject to the play or pay penalties of ACA. Note that the model notice for employers offering health insurance contemplates individualized notices indicating whether the coverage meets “minimum value” and, as to that employee, whether it is “affordable” (i.e., cost of self-only coverage does not exceed 9.5% of wages). However, the DOL Technical Release does not expressly require that information.
If you have questions about the issues addressed here, please contact Lissa Paris at email@example.com or Bill Keenan at 860.240.6028/wkeenan@ murthalaw.com.