Employers Must Provide Healthcare Law Notice by October 1

Many employers are facing a healthcare deadline that imposes a major paperwork burden. Under the Affordable Care Act, most employers are required to provide a notice to each employee by October 1, 2013 explaining their options available under the law.

According to the Department of Labor, “the notice must be provided in writing in a manner calculated to be understood by the average employee.” It can be provided by first-class mail or electronically if the certain requirements are met.

The written notice must:

1. Inform employees of the existence of the “Health Insurance Marketplace,” and include a description of the services it provides and how employees can contact the Marketplace to request assistance.

2. If the employer plan’s share of the total allowed costs of benefits provided under the plan is less than 60 percent of such costs, inform the employee that he or she may be eligible for a premium federal tax credit if the employee purchases a qualified health plan through the Marketplace.

3. Inform the employee that if he or she purchases a qualified health plan through the Marketplace, he or she may lose the employer contribution (if any) to any health benefits plan offered by the employer. In addition, all or a portion of such contribution may be excludable from income for Federal income tax purposes.

The DOL has provided model notices that employers can fill out. They can be accessed by clicking here (employers with plans) and here (employers without plans). The DOL stated on its website that an employer can satisfy its obligation to provide notices if another party, such as a third-party administrator or multi-employer plan, sends out notices on its behalf.

Which employers must send the notices? The new responsibility must be met by employers that must comply with the Fair Labor Standards Act (FLSA). In general, the FLSA applies to employers that employ one or more employees who are engaged in, or produce goods for, interstate commerce. For most firms, 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, the aged, mentally ill, or disabled who reside on the premises; schools for children who are mentally or physically disabled or gifted; preschools, elementary and secondary schools, and institutions of higher education; as well as federal, state and local government agencies.

For more information about your responsibilities to send out the written notices, consult with your HR adviser, employee benefits professional, or attorney.

 

© Copyright 2013. Thompson Reuters All rights reserved.  Brought to you by: Gordon Advisors, P.C.

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