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September 16, 2013

Deadline to Provide Notice of Health Insurance Marketplace Coverage is Due October 1

The Patient Protection and Affordable Care Act (PPACA) requires many employers to notify their employees of the availability of health care coverage under the new health care exchanges that are required to be operational by January 1, 2014. All employers subject to the Fair Labor Standards Act (FLSA) must provide this notice. In general, employers subject to FLSA are businesses or organizations that employ one or more employees, and are those that have an annual dollar volume of sales or business done of at least $500,000 or are hospitals, businesses providing medical or nursing care for residents, schools and preschools, and government agencies.

If you are subject to the FLSA, you are required to distribute this notice regardless of whether or not you currently offer health care coverage to your employees. Employers must provide this notice to all full and part-time employees.

Fortunately, the Department of Labor (DOL) published model notices for employers to use in satisfying these requirements. The DOL model notices are for Employers Who Offer Health Plans, and for Employers that Do Not Offer Health Plans. Choose the appropriate notice for your business. Employers may modify these notices as long as the modified notice still meets the requirements of PPACA.

Employers must provide the notices no later than October 1, 2013. Employees hired on or after October 1, 2013 must receive the notice no later than 14 days after their hire date. The notice must be provided automatically, free of charge, and written in language that the average employee can understand. It may be provided by first class mail or electronically if the requirements of the DOL's electronic disclosures safer harbor are met.

There are no legislated fines or penalties for failing to provide employees with the notice. However, employees may sue the employer for damages under ERISA if he or she did not receive the required notice. By not providing employee notices, damages could be significant especially if it involves an employee experiencing catastrophic claims costs, so a word to the wise is to make sure you get this notice out by the required deadlines. As added protection, make sure you document the distribution of these employee notices. If you have questions on the notice requirement, contact Larry Ruff (312-670.7444 or lruff@orba.com) or any ORBA director for assistance.

If you have questions on the notice requirement, contact Larry Ruff (312.670.7444 or lruff@orba.com) or any ORBA director for assistance.