AFFORDABLE CARE ACT NOTICES ARE DUE OCTOBER 1

By: Alan M. Levy

Every employer subject to the federal Fair Labor Standards Act (“FLSA”) is obligated to notify each of its employees of health insurance coverage options effective January 1, 2014. This notice must be provided by October 1, 2013 or, if later, at the time of the employee’s hiring. The U.S. Department of Labor (“DOL”) has issued different model notices for employers which do or do not provide health insurance to their employees.

1. Which employers and employees are subject to this requirement?

Every employer subject to the FLSA must issue this notice. Most employers with annual dollar income of $500,000.00 or more are subject to this statute, as are most non-retail employers with annual dollar income of at least $50,000.00. In addition, the FLSA applies to hospitals, residential care entities, schools, universities and colleges, and federal, state, and local government agencies.

These employers must deliver the required notices to all employees, including part-time employees, regardless of whether the employees are current plan participants.

2. What are the rules for delivery of the notice?

The notice must be delivered to all current employees on or before October 1, 2013. It must be in writing, sent either by first-class mail or by an electronic mail system which meets the DOL requirements in 29 C.F.R. § 2520.104b-1(c). The notice must be “written in a manner calculated to be understood by the average employee.” This is the same standard for most benefit documents which must be provided to employees.

3. What is the required content of the notice?

The DOL has provided two templates for the notice – one for employers which provide a health plan and one for those which do not. The notice must inform the employee of the existence of a Marketplace (called an “Exchange” in the statute), the services it offers, and its contact information. It must state whether the employer’s plan pays for less than 60% of the benefits which it provides, that the employee may be eligible for a tax credit to offset his/her premium cost, that purchase of a plan through the Marketplace may cause loss of any employer contribution toward payment of the premium, and that payment through the Marketplace may be excluded from federal income tax.

Copies of the DOL model notices can be found at http://attachment.benchmarkemail.com/c30415/ACA_Notices.pdf to this E-Alert and may be found at www.dol.gov/ebsa/healthreform. Additional information is in the DOL’s Technical Release 2013-02.

If you have any other questions about these notices, please contact Attorney Alan M. Levy, who leads the Lindner & Marsack, S.C. employee benefit practice.

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