Employer Notification of Health Insurance Marketplaces
Under the Affordable Care Act, employers of every size are required to notify employees of the availability of the Health Insurance Marketplace.
The Marketplace will provide individuals and employees of small businesses access to the purchase of health insurance coverage. The online portal will allow consumers and employers to find and compare different health insurance options. Open enrollment begins October 1, and a provision of the ACA creates a new Fair Labor Standards Act (FLSA) requiring employers to notify their employees of coverage options.
To comply with the FLSA requirement, all employers must provide each employee, regardless of plan enrollment status or part-time or full-time employment status, with a written notice that includes:
Information regarding the existence of the Marketplace, including a description of the services provided by the Marketplace and the manner in which the employee may contact the Marketplace to request assistance;
Information informing the employee that if the employer plan’s share of the total allowed costs of benefits provided under the plan is less than 60 percent of those costs, the employee may be eligible for a premium tax credit if the employee purchases a qualified health plan (QHP) through the Marketplace.
Notification that 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.
Things to note:
Covered dependents who are not employees are not required to receive a notice.
Current employees must be sent notices by October 1 of each year.
Notices must be provided to each new employee, within 14 days of an employee’s start date, at the time of hiring beginning October 1.
The notice must be provided in writing and must be written in language clearly understood by the average employee.
The notice can either be provided by first-class mail or provided electronically if the employer meets all the requirements of the Department of Labor’s electronic disclosure safe harbor.
The Department of Labor has created three different model notices for employers to communicate this information to employees. Employers should use the model notice that is applicable to them. Visit www.dol.gov to find the following notices:
Model notice for employers who offer a health plan to some or all employees
Model notice for employers who do not offer a health plan