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Required Notice to Employees Regarding New Health Care Exchanges

October 3, 2013
AAA Member Advisory
TO: AAA Membership
FROM: Brian S. Werfel, Esq.
RE: Member Advisory on DOL Notice

Required Notice to Employees Regarding New Health Care Exchanges

Section 1512 of the Affordable Care Act amended the Fair Labor Standards Act (FLSA), which requires all employers who are otherwise subject to the FLSA to prove a one-time written notice to their employees about potential coverage options through the new health care exchange marketplaces. If you are subject to this notice requirement, the compliance date for providing this notice to current employees was October 1, 2013. For new hires, the required notice must be provided within 14 days of the employee’s start date.   

If you are subject to the requirement, the written notice must inform each employee:

  1. Of the existing of the health care exchange marketplace, including a description of the services provided by the health care exchange marketplace, and the manner in which the employee may contact the health care exchange marketplace to request assistance.
  2. If your existing health care plan’s share of the total allowed costs of benefits provided under the plan are less than 60% of the costs, that the employee may be eligible for a premium tax credit if the employee purchases a qualified health plan through the health care exchange marketplace.
  3. If the employee purchases a qualified health plan through the health care exchange marketplace, that he or she 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.  

The Department of Labor (DOL) has provided model language that can be used to provide the required notices.

For employers that offer a health plan to some or all of its employees, the DOL has provided the following model notice:
http://www.dol.gov/ebsa/pdf/FLSAwithplans.pdf
.

For employers that do not offer a health plan, the DOL has provided the following model notice:
http://www.dol.gov/ebsa/pdf/FLSAwithoutplans.pdf.

AAA Continues to Monitor the Roll-Out of Health Care Exchange Marketplaces

The new Health Insurance Marketplaces (commonly referred to as the “Health Care Exchanges”) commenced operations on October 1, 2013. Initial news reports indicate that roll-out of these exchanges went relatively smoothly, with millions of website hits on the first day. However, some technical issues were noted. The AAA continues to closely monitor the operation of these exchanges, and will continue to notify members of any new developments.

Guaranteed cash flow during transition.