As you may already know – many provisions of the Patient Protection and Affordable Care Act (Affordable Care Act) are intended to expand access to affordable health care coverage nationwide. These include provisions for coverage to be offered through a Health Insurance Marketplace, assistance for purchasing coverage through premium tax credits, employer notice requirements which include coverage options available through the Marketplace, as well as, others.
With respect to the employer notice requirements provision of the Act, originally employers were expected to provide notice not later than March 1, 2013, however, on January 24, 2013, the Department of Labor (DOL) issued guidance stating the conclusion that the notice requirement under Fair Labor Standards Act (FLSA) would instead be required in late summer or fall of 2013. The DOL addressed several considerations leading to the date change which include the following:
The employer notice to employees
- Should be coordinated with the HHS’s educational efforts, and the
- Internal Revenue Service’s guidance on minimum value, as well as,
- Provide employers with sufficient time to comply while also giving employees information at a meaningful time.
Employers Subject to the Notice Requirements
Employers who fall under the FLSA must provide the notice. In general, the FLSA applies to employers that employ one (1) or more employees who are engaged in, or produce goods for, interstate commerce. For most businesses, a test of not less than $500,000 in annual dollar volume of business applies. The FLSA also specifically covers the following:
- Hospitals
- Institutions primarily engaged in the care of the sick, aged, mentally ill or disabled who reside on premises
- Schools for children who are mentally or physically disabled or gifted
- Preschools
- Elementary and secondary schools
- Institutions of higher education
- Federal, state and local government agencies
Timing and Delivery of Notice
Employers are required to provide current employees notice before October 1, 2013. Beginning October 1, 2013 each new employee must receive notice at the time of hiring. The DOL has further issued guidance that for purposes of the Act, notice at the time of hiring is fulfilled if it is provided within 14 days of the new hires start date. Notice must be in writing and in a language understood by the average employee. It can be provided either by first-class mail or electronically. If provided electronically, the requirements of the DOL’s electronic disclosure safe harbor at 29 CFR 2520.104b-1(c) must be met.
The DOL has model notices in both English and Spanish for employers who offer health plans to some or all employees as well as those who do not offer a health plan.
DOL Model Coverage Option Notices
Employers who DO offer a health plan to some or all employees:
Employers who DO NOT offer a health plan:
You may also download the notices directly from the DOL website in PDF or MS Word Format at http://www.dol.gov/ebsa/healthreform/index.html.
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