Many employers have a mistaken impression that the Patient Protection and Affordable Care Act, often referred to as ‘Obamacare’ (“Affordable Care Act”) does not become effective until 2014. While the employer mandate of the Affordable Care Act was postponed until 2015, many requirements of the Affordable Care Act begin immediately.
By October 1, 2013, employers must provide employees with basic information about the state run ‘health care exchanges’ due to be established by January 2014. This notice requirement applies to all employers covered by the Fair Labor Standards Act (“FLSA”). The vast majority of employers are subject to the FLSA and therefore are required to send the exchange notice.
The October 1, 2013 deadline requires employers to notify current employees. For employees hired after October 1, 2013, the employer must provide notice within fourteen (14) days of the new employee's first day on the job.
The exchange notice must inform employees about several aspects of the health care exchanges and must include:
The DOL has provided two “model” notices to assist employers in complying with the rule. One model notice is drafted for employers who offer a healthcare plan and the other model notice is drafted for employers who do not offer a healthcare plan. Each model notice contains two parts. Part A provides general information about the health care exchange, eligibility requirements for subsidies, and the initial open enrollment period. Part B contains more plan information that employees will need if they apply for insurance coverage on a health care exchange.
The exchange notice must be provided in writing in a manner calculated to be understood by the average employee and may be provided by first-class mail. The exchange notice can also be provided electronically, provided that the employer meets the DOL’s electronic disclosure safe harbor standard found in 29 C.F.R. § 2520.104b-1(c).
The DOL has also developed a revised COBRA notice for employers to use in the remaining months of 2013. The revised COBRA notice contains information on the availability of health care insurance plans through the health care exchanges that separating employees may elect to use instead of traditional COBRA benefits, which many former employees have found to be prohibitively expensive.
For assistance with preparation of these required notices or other employment matters, please contact Betsy Davis at (804) 697-2035 or Elliot Fitzgerald at (804) 697-2043.