An employer must furnish current employees with written notice of their health coverage options by October 1, 2013, if the employer is covered by the Fair Labor Standards Act (FLSA). The Affordable Care Act added this requirement which tells employees about health insurance Exchanges, also called Health Insurance Marketplaces, and employer-sponsored health plan options. The notice also explains the availability of coverage and premium assistance through an Exchange and how enrollment in an Exchange impacts contributions the employer may make for health-care coverage.

A Department of Labor Technical Release summarizes the FLSA definition of an employer to include: persons that have one or more employees who are engaged in, or produce goods for, interstate commerce and that have at least $500,000 in annual dollar volume of business; and certain hospitals, schools and government agencies. No “small employer” exception applies, and employers must provide the notice even if they do not offer a health plan.

Notice must be provided to all employees, full-time and part-time, even those who do not have or are not eligible for coverage under an employer-sponsored health plan. Also, the employees to whom the notice must be provided are not necessarily the same individuals who are employees for purposes of ERISA and the tax Code. For example, independent contractors for tax purposes may be employees who are entitled to receive the notice.

Employers may use model notices provided by the Department of Labor to satisfy this obligation. New employees must be given notice at the time of hiring beginning October 1, 2013. For 2014, the notice is timely if it is furnished within 14 days of the new employee’s start date.

The notices must be delivered by first-class mail. Electronic delivery is permitted if it complies with the DOL’s electronic disclosure safe harbor.

Employers that fail to provide the notice are not subject to an FLSA fine or penalty from the DOL.

How are you keeping track of the Affordable Care Act deadlines that apply to you and your plans?

--Nadia Masri

Editor (Compensation Planning)