Recently, the Department of Labor (DOL) issued Technical Release No. 2013-02. This release contains temporary guidance and model notice language to assist employers subject to the Fair Labor Standards Act (FLSA) with their notification requirement under new FLSA Section 18B (as added by Section 1512 of the Affordable Care Act). Such employers must notify employees of health coverage options available to them through the Health Insurance Marketplace (formerly referred to as the “Exchange”). The notification must also include the potential consequences of acquiring coverage through the Marketplace in lieu of enrolling in employer-sponsored group health coverage.
These notices – originally scheduled to be required for employers beginning March 1, 2013 – are to be automatically provided to ALL existing employees by October 1, 2013 and to ALL new employees hired on or after October 1, 2013 within 14 days of their respective start dates.
Employees must receive the Marketplace Notice automatically and free of charge from their employer. The technical release further clarifies that the notice may be delivered by first-class mail, or electronically if the employer satisfies the Employee Retirement Income Security Act (ERISA) electronic disclosure safe harbor (29 CFR 2520.104b-1(c)) rules.
Please note: Employers must provide the Marketplace Notice to all employees, without regard to whether the employer provides health coverage or whether the employee is eligible for coverage that is provided by the employer.
Model Marketplace Notice
The DOL also provided a model notice that employers may, but are not required to, use:
The Model Notice for Employers Who Offer a Health Plan to Some or All Employees includes:
- A brief description of the Health Insurance Marketplace (or “Marketplace”);
- Premium tax credit information;
- A statement informing the notice recipient that purchasing insurance through the Marketplace may result in a loss of any employer contributions to the employer-sponsored group health plan or tax benefits associated with such coverage; and
- A link to a website for more information about the Marketplace, including an enrollment application.
- Information specific to the employer and its group health plan (e.g., a description of the terms of eligibility for employees and dependents, an indication of whether or not the coverage meets the “minimum value standard” and is intended by the employer to be affordable based on employee wages); and
- An optional section related to the Marketplace Employer Coverage Tool included to help employees understand their coverage options
Please note: The information related to coverage under the employer’s plan, including whether the coverage provides minimum value and is intended to be affordable, relates to ANY minimum essential coverage offered by any size employer to ANY employee – part-time or full-time. This may seem counter-intuitive to those who have previously viewed terms such as “minimum value” and “affordability” as concepts limited to the “Pay or Play” rules, which apply only to “applicable large employers” and relate only to the coverage offered to full-time employees. However, under the premium subsidy rules established by the IRS, any employee of any employer will be disqualified from receiving a subsidy in the Marketplace if the employee is eligible for minimum essential coverage from his or her employer and the coverage is affordable and provides minimum value.
For more information, go to the DOL website or please call our office at 760 438-9311 | 800 461-6647.
