The healthcare reform law requires that all companies covered by the Fair Labor Standard Act provide and/or circulate written notice to all their workers informing them of the ability to purchase health insurance through the new Health Insurance Marketplace (the health exchanges) that open on Oct. 1. They are required to provide this notice before Oct. 1, 2013.
Does this requirement apply to me? If you employ at least one individual and you conduct business, you are likely covered under the FLSA. To gain specific interpretation based on your facts and circumstances, you can request an advisory opinion from the DOL. (http://www.dol.gov/ebsa/regs/AOs/main.html)
What does my employee notice need to say?
According to the US Department of Labor, the notice should include the following:
· Inform employees about the Health Insurance Marketplace
· Inform employees that, depending on their income and what coverage may (or may not) be offered by the employer, they may be able to get lower cost private insurance in the Marketplace
· Inform employees that if they buy insurance through the Marketplace, they may lose the employer contribution (if any) to their health benefits
How do I go about generating this notice?
The Department of Labor has provided 2 model notices to help employers comply. They are available through their website:
· Notice for employers that offer health insurance to some or all workers: http://www.dol.gov/ebsa/pdf/FLSAwithplans.pdf
· Notice for employers that do not offer health insurance: http://www.dol.gov/ebsa/pdf/FLSAwithoutplans.pdf
· You may use either of the provided models, a modified version of the models, or one of your own as long as it meets all requirements.
What if I don’t comply?
The DOL just announced that no “monetary penalty” will be assessed to any company that fails to comply by Oct 1. However, many employment law experts are suggesting that compliance is still key. Attorney Christine Roberts suggested that non-compliance could open the door to an ERISA audit. (http://eforerisa.wordpress.com/2013/09/11/exchange-notice-penalties-there-arent-any/)
What if my employees have questions?
This required notice may generate confusion. Here are some important facts we suggest you include in the notice:
· Exchange coverage will begin Jan 1, 2014. Though the exchanges will begin accepting applications for coverage on Oct 1, no coverage will begin until Jan 1, 2014.
· Whether your company will help pay for exchange coverage. You are not required to contribute to health insurance coverage your employees purchase on an exchange. If you choose not to (as most employers will), let employees know. If you sponsor a health plan, you may want to explain how much you’re contributing to employee premiums so they can see what they’ll be missing and have a better idea of how much more (or less) they’ll have to pay for insurance in an exchange.
· Exchanges may be good for some. Employees who are not currently offered health insurance (including part-timers), may be able to purchase an insurance plan via an exchange cheaply – especially if they qualify for a tax credit. That applies to spouses and children who aren’t offered much (or any) coverage under an employer-sponsored plan.
· How the tax credits will work. For those who are exploring the option of purchasing coverage via an exchange, they will need to understand how the tax credits will work. It might be beneficial for employees to do some research online and/or engage a tax professional to help make that decision.
If you have further questions, contact a Larson professional today.