Late last week, the Department of Labor’s Employee Benefits Security Administration (EBSA) released guidance detailing notices that must be provided to employees regarding employee health coverage options under the Affordable Care Act (ACA), in addition to an updated model election notice under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA).
The guidance requires employers to notify new employees, as well as current employees, no later than March 1, 2013:
- Informing the employee of the existence of the Marketplace (referred to in the statute as the Exchange) including a description of the services provided by the Marketplace, and the manner in which the employee may contact the Marketplace to request assistance;
- If the employer plan's share of the total allowed costs of benefits provided under the plan is less than 60 percent of such costs, the employee may be eligible for a premium tax credit under section 36B of the Internal Revenue Code (the Code) if the employee purchases a qualified health plan through the Marketplace; and
- If the employee purchases a qualified health plan through the Marketplace, the employee may lose the employer contribution (if any) to any health benefits plan offered by the employer, and that all or a portion of such contribution may be excludable from income for Federal income tax purposes.
In January 2013, EBSA delayed the March 1, 2013 compliance date because a definition of the minimum value had not yet been established. The Department stated they expect the timing of the notices to be late summer or fall of 2013 to coordinate with open enrollment for the Marketplace. (Open enrollment is expected to begin October 1, 2013, for coverage effective in 2014.)
Employers must provide the notice if they are subject to the Fair Labor Standards Act (FLSA). In general, the FLSA applies to employers who have one or more employees and an annual sales volume of at least $500,000. Employers must provide the notice to each employee, including part-time employees
For the full guidance text, visit http://www.dol.gov/ebsa/newsroom/tr13-02.html.