DOL Issues a Model Notice for the Affordable Care Act

Many provisions of the Affordable Care Act (“ACA”) become effective in 2014.  Others are effective this year.  Beginning October 1, 2013, most employers must notify employees of the coverage options available through the Health Insurance Marketplace established by the ACA. Employers are free to create their own notices, but the US Department of Labor has issued a Model Notice that employers can use to fulfill their obligations under the ACA.

You may have heard that employers with fewer than fifty employees are not required to offer insurance coverage to their employees and that they are exempt from any penalties.  While that is true, the Notice requirement is technically part of the Fair Labor Standards Act, so many more employers are affected.  Any employer with at least one employee engaged in “interstate commerce” or which has more than $500,000 in sales is covered by the FLSA, so the vast majority of employers will be required to provide the Notice to their employees.

The Notice must include the following information:

• The existence of a new Marketplace as well as contact information and description of the services provided by a Marketplace.
• The availability of a “premium tax credit” if the employee purchases a qualified health plan through the Marketplace.
• The Notice must inform employee that if she purchases a qualified health plan through the Marketplace, the employee she 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.

Existing employees must receive the Notice by October 1, 2013. Each new employee hired after on or after October 1, 2013 must receive the Notice upon hiring.

There are actually two Model Notices, one for employers that do not offer a health plan (here) and one for employers that offer a health plan to some or all of its employees (here).