The Patient Protection and Affordable Care Act added Section 18B to the Fair Labor Standards Act (FLSA), requiring employers to give notice to employees of the coverage options available through state insurance exchanges. Employers must distribute these notices to all current employees no later than October 1, 2013, and to new employees hired on or after October 1, 2013 at the time of hire. The Department of Labor (DOL) recently released model notices that employers may use to provide the required notice.
All employers subject to the FLSA must provide notice of coverage options available through the state health insurance exchanges (e.g. Covered California in California). Section 18B of the FLSA (Section 18B) sets forth specific information that must be included in the notice. It must describe the services provided by the state health insurance exchange and its contact information. The notice must also describe the circumstances under which the employee may be eligible for a premium tax credit and cost-sharing reduction if the employee purchases insurance through the exchange. Additionally, the notice must inform the employee that if he or she purchases insurance through the exchange, he or she may lose any employer contribution for group health coverage offered by the employer which, if used by the employee, may be excludable from income for federal income tax purposes.
The DOL has issued two different model notices, one that may be used by employers who offer health coverage to employees and the other that may be used for those who do not offer coverage. Though the model notices do not contain the level of specificity that Section 18B appears to require, the DOL has indicated that these notices may be used until further guidance and/or regulations are issued. An employer may opt to distribute a customized notice, but it must meet the specific requirements outlined in Section 18B. Notices may be provided by first class mail, or, if certain conditions are met, electronically.
For questions about these notice requirements or the implementation of the Patient Protection and Affordable Care Act, please contact John Wahlin, Isabel Safie or Allison De Tal in the firm’s Employee Benefits practice group, or your BB&K attorney.