June 30, 2015
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June 27, 2015
Notices Required by the Affordable Care Act by October 2013
By October 1, 2013, employers must provide current employees and new hires with notices concerning health insurance and state exchanges created pursuant to the Affordable Care Act (“ACA”). These notices are required by section 18B of the Fair Labor Standards Act (“FLSA”), an amendment created by the ACA.
Originally, the employer notification was to occur by March 1, 2013, but the deadline was delayed. On May 8, 2013, the U.S. Department of Labor (“DOL”) issued Technical Release No. 2013-02, which announced the long-awaited instruction and contained a Model Notice to Employees of Coverage Options.
Employers subject to FLSA must distribute the notice to current employees no later than October 1, 2013. New employees must be given the notice at the time of hire beginning October 1, 2013. For 2014, the DOL will consider a notice to be provided at the time of hire if it is provided within 14 days of an employee’s start date. The notice is applicable to all employees, regardless of their plan enrollment or part/full-time status. It must be provided automatically, free of charge, and may be provided by first-class mail or electronically, so long as it meets the requirements of the DOL’s electronic disclosure policies.
The DOL provided specific details for such notice, as follows:
“[T]he notice to inform employees of coverage options must include information regarding the existence of a new Marketplace [state exchange] as well as contact information and description of the services provided by a Marketplace. The notice must also inform the employee that the employee may be eligible for a premium tax credit under section 36B of the Code if the employee purchases a qualified health plan through the Marketplace; and a statement informing the employee 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 and that all or a portion of such contribution may be excludable from income for Federal income tax purposes.”
The Technical Release also provides an updated model election notice for the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) to reflect alternatives offered through the exchanges for comparative purposes.
The model notices should serve as a reminder that employers must determine their obligations under the ACA, and must do so soon.