Employment Law Alert - September 2013: The Affordable Care Act - October 1, 2013 Notice Requirement for Employers

Beginning January 1, 2014, individuals and employees of small businesses will have access to affordable coverage through a new competitive private health insurance market – the Health Insurance Marketplace.  The “Marketplace,” also commonly referred to as the “Exchange,” offers individuals and employees “one-stop shopping” to find and compare private health insurance options. Open enrollment for health insurance in the Marketplace begins on October 1, 2013.

All employers covered under the Fair Labor Standards Act (“FLSA”)[1] must provide written notice of coverage options available through the Marketplace to each full-time and part-time employee. This requirement applies regardless of whether the employer is offering healthcare coverage to its employees.

           The notice must inform the employee:

(a) of the existence of the Marketplace, as well as contact information and description of the services provided by the Marketplace;

(b) that the employee may be eligible for a premium tax credit if the employee purchases a qualified health plan through the Marketplace; and

(c) that if the employee purchases a qualified health plan through the Marketplace, the employee may lose the employer contribution (if any) to any health benefits plan offered by the employer.  

 

Model notices can be found on the Department of Labor website. Employers offering coverage should visit http://www.dol.gov.ebsa/pdf/FLSAwithplans.pdf.

For employers not offering healthcare coverage, see please http://www.dol.gov/ebsa/pdf/FLSAwithoutplans.pdf
 

For employees hired before October 1, 2013, the notice must be provided by October 1, 2013. For new employees hired on or after October 1, 2013, the notice must be provided to each new employee at the time of hiring, within 14 days of an employee’s start date.  Employers are not required to provide separate notices to dependants or other non-employees who are or may become eligible for coverage under the plan. 

 

The notice may be provided to the employee by first-class mail. The notice can also be delivered electronically, so long as the employer’s e-mail system results in actual receipt by the employee. The employer must also inform the employee of his or her right to request a paper version of the notice.

The implementation of the Affordable Care Act will continue to have a significant impact on employers.  Employers should consult with counsel knowledgeable in this area to ensure that they are in compliance with their obligations.


[1] The FLSA generally applies to employers who “employ one or more employees who are engaged in, or produce goods for, interstate commerce.” For further guidance regarding FLSA coverage and to determine whether the employer is covered FLSA, please visit http://www.dol.gov/elaws/esa/flsa/scope/screen24.asp.

 

Topics:  Affordable Care Act, Deadlines, FLSA, Health Insurance Exchanges, Healthcare, Marketplace Notice

Published In: Health Updates, Insurance Updates, Labor & Employment Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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