October 1, 2013 Deadline to Provide Employees with Written Notice of Health Care Options

The Patient Protection and Affordable Care Act (PPACA) requires most employers to provide notice to current employees and new hires about the forthcoming health insurance exchanges (termed “Marketplaces” by the Department of Labor), and subsidies that may be available through the exchanges for qualified individuals.

By October 1, 2013, employers that are subject to the FLSA must provide written notice to employees of the new health care exchanges created by PPACA.

The Department of Labor offers 3 model notices that employers may distribute:

• Notice for use by employers who do not offer a health plan
• Notice for use by employers who do offer a health plan
• Notice to employees eligible for COBRA

Employers may use the model notices after filling in the specific employer information, or they may draft their own notice, which must meet these substantive requirements:

1. Inform the employee of the existence of the new healthcare “Marketplace” created by PPACA, with adequate description, and instruction on how to contact the Marketplace for further information.
2. Inform the employee of possible eligibility for a premium tax credit under 36B of the Internal Revenue Code (if the employer plan’s share of total allowed costs of benefits is less than 60% of such costs, and the employee chooses instead to purchase a qualified health plan through the Marketplace).
3. Inform the employee that he waives his employer’s contribution to any health benefits plan if he purchases a plan through the Marketplace and that such contribution may be excludable from income for Federal income tax purposes.

Employers should remember that this notice must subsequently be provided to all new hires at the time of hiring (within 14 days of start date). The notice must be given regardless of full time or part time status. It may be mailed to employees, or “provided in writing in a manner calculated to be understood by the average employee.” It may be emailed in accord with DOL electronic disclosure safe harbor protections (29 CFR 2520.104b-1(c)).