The Affordable Care Act (ACA) requires employers to provide all new hires and current employees with a written notice about ACA’s Health Insurance Marketplace, or exchanges, by October 1, 2013. This requirement is found in Section 18B of the Fair Labor Standards Act (FLSA). ACA’s exchange notice requirement applies to employers that are subject to the FLSA. Employers must provide the exchange notice to each employee, regardless of plan enrollment status or 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. Employees hired after October 1, 2013, must be provided this notice within 14 days of the employee's start date.
The exhange notice should inform employees about the existence of the exchange and describe the services provided and the manner in which the employee may contact the exchange to request assistance. The notice should also explain how employees may be eligible for a premium tax credit or a cost-sharing reduction if the employer's plan does not meet certain requirements. The notice must also inform employees that if they purchase coverage through the exchange, they may lose any employer contribution toward the cost of employer-provided coverage, and that all or a portion of this employer contribution may be excludable for federal income tax purposes. The notice should include contact information for the exchange and an explanation of appeal rights.
The Department of Labor has provided two sample exchange notices, one for employers who offer a health plan to some or all employees and one for employers who do not offer a health plan. Employers may use one of these models, as applicable, or a modified version, provided the notice meets the content requirements described above.
Featured in TAXPRO Weekly - August 22, 2013