Effective October 1, 2013, employers face a new obligation in accordance with the Patient Protection and Affordable Care Act (PPACA). Nearly all employers must distribute a notice of coverage options to their employees no later than October 1, 2013; and after that date, to all new hires within 14 days of their start date.
The Department of Labor (DOL) has issued two model notices that may be used to meet this obligation.
Employers may use the appropriate DOL model notice to satisfy the content requirements of the statute, or a modified version, provided the notice includes the following:
- information regarding the existence of a new Health Insurance Marketplace as well as contact information and a description of the services provided by the Health Insurance Marketplace;
- notice that the employee may be eligible for a premium tax credit under Section 36B of the Internal Revenue Code if the employee purchases a qualified health plan through the Health Insurance Marketplace; and
- a statement informing the employee that if the employee purchases a qualified health plan through the Health Insurance Marketplace, the employee may lose the employer contribution (if any) to any health benefit 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 obligation to distribute the notice applies to all employers subject to the FLSA. In general, this includes employers with one or more employees who are engaged in or produce goods for, interstate commerce. For most employers, a test of not less than $500,000 in annual dollar volume of business applies. The notice must be sent to all employees, regardless of plan enrollment status or of part-time or full-time status. Employers are not required to provide a separate notice to dependents or other individuals who are or may become eligible for coverage under the plan but who are not employees.
Employers must provide the notice to all current employees not later than October 1, 2013. The notice is required to be provided automatically, free of charge. You must also provide the notice to each new employee at the time of hiring beginning October 1, 2013. For 2014, the DOL will consider a notice to be provided at the time of hiring if the notice is provided within 14 days of an employee’s start date. These notices should be sent as soon as administratively possible to meet the October 1, 2013 distribution deadline. After that date, the notice should also be included in new hire materials and distributed to new employees within fourteen (14) days of their start dates.
NOTE: This general summary of the law should not be used to solve individual problems since slight changes in the fact situation may require a material variance in the applicable legal advice.