If you’re in the same boat as I am, you may be wondering where summer went. It was just July. And yet somehow, Tuesday marks the first day of October. That means we should expect to see Christmas decorations cluttering grocery store aisles any day now and that Health Care Reform Notices (a.k.a. notice of coverage options under Fair Labor Standards Act) are due to employees. So here is your friendly reminder to send them out—soon. If you have no idea to what I’m referring, here’s a quick breakdown from this National Law Review article:
Employers who are subject to the Fair Labor Standards Act (FLSA) must provide the notice. (Not sure whether or not this applies to you? Check out this US Department of Labor (DOL) page.)
Employers must provide this notice to all employees, regardless of plan enrollment or full-time/part-time status.
Employers must provide all current employees with the notice on or before October 1, 2013. For future employees, employers must provide the notice within 14 days of the employee’s start date.
Employers must provide employees with the notice “automatically, free of charge, by first class mail, or through ERISA’s electronic distribution safe harbor.”
What must the notice contain?
The notice must inform the employee:
- about the new Health Care Reform Marketplace (a.k.a. the Exchanges), including a description of the services available through the Marketplace as well as the ways in which an employee can contact the Marketplace for assistance.
- that he or she may be eligible for a premium tax credit under section 36B of the Internal Revenue Code if the employer plan’s share of the total allowed cost of benefits is less than 60% and the employee purchases a qualified health plan through the Marketplace.
- that if he or she purchases a qualified health plan through the Marketplace, he or she may lose employer contribution to employer-offered plans, and that contribution may be excludable from income for Federal income tax purposes.
Are there sample notices?
You betcha. The DOL issued two notices that employers can use to ensure that they are meeting the notice requirements. The first is meant for companies that offer health and insurance, and the second is meant for companies that do not.
Will there be penalties for noncompliance?
According to an article titled “Healthcare reform letters due 10/1: What you need to know,” there won’t necessarily be penalties for noncompliance, but there may be “consequences”―of what nature, we’re really not sure. So we recommend just going ahead with preparing and sending out the letters before Tuesday. It’s a small requirement―important for your employees―that’s not really worth the risk of potentially negative repercussions. And the article’s author agrees: “Bottom line: Even though there’s no monetary penalty for failing to provide the exchange notices, the safest bet for employers is to stay the course and issue them by Oct. 1.”
Want more information on the notice? Check out this technical release from the Department of Labor.