Here’s another sleep-inducing bulletin regarding employer-sponsored obligations related to Obamacare / Affordable Care Act / PPACA / Whatever-you-want-to-call-it. Boring, yes. But it’s one of those things you may need to know…
Due to market demand, the Department of Labor published Technical Release 2013-02, Guidance on the Notice to Employees of Coverage Options Under Fair Labor Standards Act, on May 8, 2013. This document provides temporary guidance about the Affordable Care Act’s requirement that employers notify employees of their coverage options, particularly coverage options available through the Exchanges. The guidance provided in the Technical Release should be followed until the department issues other regulations or final guidance. Any future guidance will allow adequate time to comply with additional or different requirements.
According to the Technical Release, applicable employers (i.e., those subject to the Fair Labor Standards Act, or FLSA*) must give employees at the time of hire (or by October 1, 2013, for current employees), a written notice to:
- Inform the employee of the existence of the Health Insurance Marketplaces, including contact information and a description of services provided by the Marketplaces
- Tell the employee that he or she may be eligible for a premium tax credit if: (1) the employer’s plan does not cover at least 60 percent of the total allowed cost of benefits provided by the plan, and (2) the employee purchases a Qualified Health Plan (QHP) through the Marketplace
- Remind the employee that he or she may lose the employer contribution (if any) to the employer’s health benefit plan if the employee purchases a QHP through the Marketplace and all or some portion of such contribution may be excludable from income for federal income tax purposes
The Technical Release announces the availability of two model notices:
The document also updates the COBRA Continuation Coverage Election Notice for group health plans when they offer continuation coverage under Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA).
Employers must provide the applicable notice of coverage options to all employees, both full-time and part-time, regardless of whether the employees are enrolled in any available employer-sponsored plan. However, employers are not required to provide a separate notice to employees’ dependents.
At least some insurance companies will not handle the required notice of coverage options for their groups. So it’s up to employers to do so.
*The Department of Labor’s Wage and Hour Division provides guidance relating to the applicability of the FLSA in general, including an internet compliance assistance tool to determine its applicability, at http://www.dol.gov/elaws/esa/