Affordable Care Act: Employee Communication Required by October 1, 2013

Posted on 09.13.13

Although the employer mandate has been delayed, employers covered by the Fair Labor Standards Act
(FLSA)* are required to provide a notice to all employees, regardless of plan enrollment status or part-time or full-time status, by October 1, 2013.  The notice must include the following:  
 

    1. Information regarding the existence of the Exchange, including a description of the services provided by the Exchange, and the manner in which the employee may contact the Exchange to request assistance
    2. A statement that, if the employer plan’s share of the total allowed costs of benefits provided under the plan is less than 60% of such costs, the employee may be eligible for a premium tax credit if the employee purchases a qualified health plan through the Exchange
    3. A statement that, if the employee purchases a qualified health plan through the Exchange, the employee may lose any employer contribution to any health benefits plan offered by the employer and that all or a portion of the contribution may be excludable from income for federal income tax purposes

The notice must be written in language that can be understood by the average employee.  It may be delivered by first-class mail or, if certain requirements are met, electronically.  It must be provided to new hires within 14 days of an employee’s start date. 

The Department of Labor (DOL) has provided two Model Notices, one for employers offering insurance coverage to employees http://www.dol.gov/ebsa/pdf/FLSAwithplans.pdf  and the other for employers not offering coverage http://www.dol.gov/ebsa/pdf/FLSAwithoutplans.pdf.

Should you have any questions, feel free to contact your Keiter professional.

*Businesses covered by the FLSA must have at least two employees, and are those that have an annual dollar volume of sales or business revenue of at least $500,000 or are hospitals, businesses providing medical or nursing care for residents, schools and preschools or government agencies.