As part of the “Obamacare” laws and rules that are slowly coming into force, employers have a new requirement as of October 1, 2013. This probably applies to your business; read on for details. This has been adapted from Technical Release 2013-02 published by the Department of Labor.
The Short Version
The new “health insurance marketplace” is supposed to be available on January 1, 2014 for individuals and employees of small businesses, and tax credits will be available to a lot of people to help them pay for coverage. The federal government wants people to know this, so they are requiring employers to provide notices to all their employees.
The definition of who it applies to is murky, and there are no penalties specified in the law for what happens if you don’t send this out, but we figure it would be better to err on the side of caution and send these notices out to your employees. Update 9/11/13: the Department of Labor clarified that there is no fine for failing to provide this notice.
Still, think of it as the same kind of requirement as a COBRA notice or a 1099. It’s just something you should do.
Specifically, Section 1512 of the Affordable Care Act adds a new section 18B to the Fair Labor Standards Act (FLSA)
Which employers are subject to the requirement?
Officially, “employers who employ one or more employees who are engaged in, or produce goods for, interstate commerce.” It also specifically applies to certain kinds of employers such as hospitals, schools, and federal/state/local government agencies. Since virtually every business could be considered to engage in interstate commerce of some kind or another, this is very broad.
The number of employees in your business, their full/part time status, and whether or not they currently participate in a group medical plan offered by your business, does not matter.
Which employees need to get the notice, and when?
Current employees need to be provided a notice by October 1, 2013. For new hires after that date, notice must be provided within 14 days of their start date.
How can it be delivered?
By first class mail, or electronically if you meet the Department of Labor’s “safe habor” practices.
What Does It Need To Say?
There is a “model notice” at the Department of Labor’s web site that you can fill out and distribute. (Actually, there are different ones depending on whether you currently offer, or don’t offer, a health plan.) In our opinion, the model notices are not very well-written, but using the one that’s provided is a safe bet.