Beginning January 1, 2014, individuals and employees of small businesses will have access to affordable coverage through a new competitive private health insurance market – the Health Insurance Marketplace. The Marketplace offers “one-stop shopping” to find and compare private health insurance options. Open enrollment for health insurance coverage through the Marketplace begins October 1, 2013. Section 1512 of the Affordable Care Act creates a new Fair Labor Standards Act (FLSA) section 18B requiring a notice to employees of coverage options available through the Marketplace.(1)
Timing and Delivery of Notice
On January 24, 2013, the Department of Labor issued guidance stating that the notice requirement will not take effect on March 1, 2013. On May 8, 2013, the Department issued that employers are required to provide the notice to each new employee and each current employee at the time of hiring beginning October 1, 2013. For 2014, the notice must be provided within 14 days of an employee’s start date.
Each employee must be provided with a notice, regardless of plan enrollment status or of 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.
The notice is required to be provided automatically, free of charge. It may be provided by first-class mail. It may also be provided electronically if the Department’s electronic safe harbor rules are met.
Form and Content of Notice
The notice to inform employees of coverage options must include information regarding the existence of a new Marketplace as well as contact information and description of the services provided by a Marketplace.
The notice must also inform the employee that the employee may be eligible for a premium tax credit under section 36B of the Code if the employee purchases a qualified health plan through the Marketplace; and a statement informing the employee that if the employee purchases a qualified health plan through the Marketplace, the employee may lose the employer contribution (if any) to any health benefits plan offered by the employer and that all or a portion of such contribution may be excludable from income for Federal income tax purposes.
Model language is available on the Department’s website www.dol.gov/ebsa/healthreform. There is one model for employers who do not offer a health plan and another model for employers who offer a health plan to some or all employees.
Model Notice for employers who do not offer a health plan
Model Notice for employers who offer a health plan to some or all employees