Employee Benefits Compliance, Exchanges, Health Insurance Marketplaces, Marketplaces, Notices & Disclosures (Sample forms), Reporting & Disclosure

New DOL FAQ says No Penalty on Employers Who Do Not Send Exchange Notices to all Employees by Oct 1

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The Department of Labor (DOL) issued a new Frequently Asked Question (FAQ) on  September 11, 2013 – clarifying that employers subject to the Fair Labor Standards Act (FLSA) should provide all employees a written notice about the Health Insurance Marketplace (“Exchange Notice”) by October 1, 2013, but that there is no penalty under the law on an employer that does not send out the Notice of Coverage Options by October 1. The FAQ does not specifically address whether or not a penalty applies if an employer does not provide the Exchange Notice to employees hired after October 1, 2013.  (The FAQ is at http://www.dol.gov/ebsa/faqs/faq-noticeofcoverageoptions.html)

The Leavitt Group encourages all employers who are subject to FLSA to send Exchange Notices to all employees by the October 1 deadline, even if no penalty applies.   If you need assistance, please contact  your Leavitt advisor.  We have the model notices from the DOL (also available on the DOL website), in English and Spanish, and we also have  a sample cover letter you can send with the model notice (also in English and Spanish).

The full DOL FAQ is reproduced below.

FAQ on Notice of Coverage Options

Q: Can an employer be fined for failing to provide employees with notice about the Affordable Care Act’s new Health Insurance Marketplace?

A: No. If your company is covered by the Fair Labor Standards Act, it should provide a written notice to its employees about the Health Insurance Marketplace by October 1, 2013, but there is no fine or penalty under the law for failing to provide the notice.

The notice should inform employees:

  • About the Health Insurance Marketplace;
  • That, depending on their income and what coverage may be offered by the employer, they may be able to get lower cost private insurance in the Marketplace; and
  • That if they buy insurance through the Marketplace, they may lose the employer contribution (if any) to their health benefits

The U.S. Department of Labor has two model notices to help employers comply. There is one model for employers who do not offer a health plan and another model for employers who offer a health plan or some or all employees:

Model Notice for employers who offer a health plan to some or all employees

Model Notice for employers who do not offer a health plan

The model notices are also available in Spanish and MS Word format at http://www.dol.gov/ebsa/healthreform/.

Employers may use one of these models, as applicable, or a modified version. More compliance assistance information is available in a Technical Release issued by the US Department of Labor.