Insights

Notice to Employees of Health Insurance Marketplace Options

Notice to Employees of Health Insurance Marketplace Options

Sep 11, 2013

Section 1512 of the Patient Protection and Affordable Care Act created a new Fair Labor Standards Act (FLSA) Section 18B, which requires a notice to employees of coverage options available through the State Marketplaces, which were set to be operational January 1, 2014. By its terms, the notice requirement applies to employers subject to FLSA, which generally means employers engaged in interstate commerce that employ one or more employees and have more than $500,000 in annual revenues. However, the notice requirement in FLSA Section 18B does not appear to have this same limitation and instead appears to apply to a broad definition of employer under the FLSA, which includes any employer that employs one or more employees. As with other provisions of the Affordable Care Act, this applies to all employers—private, public, and nonprofit.

Employers must provide a notice to each employee, regardless of whether they are covered by insurance or not and regardless of whether they are full-time or part-time. A separate notice is not required for dependents or others who are covered under an employer health insurance plan.

The notice must inform employees of the new Marketplace available in their state of residence, including that they may be eligible for a premium tax credit to pay premiums on health insurance purchased through the state Marketplace. The employer must also provide information on the employer-sponsored coverage, if any, and the intent of the employer to meet the Employer Mandate requirements of the Affordable Care Act (which applies to employers with more than 50 full-time equivalent employees). In addition, it must explain that an employee would lose employer-sponsored coverage, along with the related tax benefit, if they purchase insurance on the Marketplace.

The initial notice was to be provided no later than October 1, 2013. Each new employee must receive the notice within 14 days of an employee’s start date. The notice must be provided in writing or electronically if the requirements of the Department of Labor’s electronic disclosure safe harbor are met [29 CFR 2520.104b-1(c)].

The Department of Labor has provided two model notices, one for employers that offer health insurance coverage and one for employers that do not offer health insurance coverage.

Note that employers with health insurance voluntarily complete page 3 of the notice.

If you have questions or need assistance, please contact your benefits consultant or your Wipfli relationship executive. Wipfli is glad to help, and you may be directed to one of our Affordable Care Act experts for assistance.