Under the Affordable Care Act (ACA), individuals and small businesses will be able to purchase health insurance coverage online through the new health insurance coverage exchanges (now known as “Marketplaces”). Marketplace coverage is scheduled to be available on January 1, 2014, with the first open enrollment beginning October 1, 2013. Employers subject to the Fair Labor Standards Act1 (FLSA) must provide information about the health insurance marketplace (“Marketplace Notice”) before October 1, 2013.
The Marketplace Notice must be given in writing by first class mail, or, in the alternative, can be provided electronically if Department of Labor (DOL) electronic distribution rules are satisfied. The notice must be provided, free of charge, to all employees. This includes full-time employees, part-time employees, and even union employees who may obtain coverage through a multiemployer welfare fund. New employees hired on or after October 1, 2013, must be provided with a copy of the Marketplace Notice within 14 days of hire.
The Marketplace Notice must contain the following information:
The existence of the Marketplace, including a description of the services provided by the Marketplace, and how the employee may contact the Marketplace to request assistance;
The employee might be eligible for a premium tax credit if the employee purchases coverage through the Marketplace; and
If the employee does purchase coverage through the Marketplace, the employee may lose the employer contribution (if any) to any health benefits plan offered by the employer; and that all or a portion of any employer contributions may be excludable from income for federal income tax purposes.
The DOL issued Technical Release 2013-2 to assist employers in satisfying the Marketplace Notice requirement.2 In addition, the DOL issued model notices, one for employers who do not offer coverage and one for employers who offer coverage to some or all employees.3 The Model Notices contain optional provisions that can be completed. If you offer coverage to some but not all of your employees, these “optional” sections are designed to give information your employees must have in order to apply for Marketplace coverage. If you have employees that may seek coverage in a state or federally-facilitated Marketplace, you should also prepare for and anticipate that some employees may ask you to assist with their applications by completing a form called the “Employer Coverage Tool.”
Some employees may think you are required to provide them with health coverage in 2014. Many employees may not understand why you are sending out the Marketplace Notice. Your employees will be bombarded with information about the new Health Insurance Marketplace, from numerous sources.
Since the “individual mandate” – the requirement that individuals maintain health coverage in 2014 or pay additional taxes – is still effective for 2014, it is important to manage your employees’ expectations, as well as anticipate their questions. While you should be careful not to make incorrect statements or misrepresentations about Marketplace coverage or any employer-provided coverage that may be available, consider including a cover letter that will address some of your employees’ questions and concerns.
Employers can be subject to the FLSA either on a covered enterprise basis or because they have employees who are "engaged in commerce or the production of work for commerce.” It appears that all employers who are subject to the FLSA, whether because of their status as covered enterprises or their employment of protected employees who are "engaged in commerce or the production of work for commerce,” must provide the Marketplace Notice. Remember, the FLSA also applies to governmental agencies, hospitals, and schools.
See: www.dol.gov/ebsa/healthreform. The DOL has also updated its model COBRA Election Notice to provide information about the availability of health coverage and possible tax credits through the Marketplace. See: www.dol.gov/ebsa/cobra.html.