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Notice to Employees of Insurance Coverage Options Due by 10/1/13

Friday, September 27, 2013   (0 Comments)

Notice to Employees of Insurance Coverage Options Due by 10/1/13

The Healthcare Reform Act requires employers to provide a written Notice of Availability of Insurance Marketplaces to employees by October 1, 2013.

Employers must notify all employees:

  • of the existence of an insurance marketplace,
  • that the employee may be eligible for premium assistance and a subsidy under the marketplace, and
  • that if the employee purchases a policy through the insurance marketplace, he or she may lose the employer contribution to any health benefits offered by the employer.

Employers (including those who do not offer health coverage to their employees) must distribute the appropriate notice to all employees (regardless of plan enrollment status or part-time or full-time status). For all employees who are employed before October 1, 2013, the notice must be provided by October 1, 2013. For employees hired after September 30, 2013, the notice must be provided at the time of hiring; however, for 2014, a notice provided within 14 days of an employee's start date will be considered provided at the time of hiring.  

The Department of Labor (DOL) issued two model notices in May 2013 that may be used for current and new employees. One model is for employers who offer employer-provided health insurance coverage to some or all of their employees and the other model is for employers who do not offer employer-provided health insurance coverage:

The model notices must be revised by employers to include identifying and contact information. In addition, employers who offer health insurance coverage must provide information on:

  • which employees are offered coverage, eligibility requirements,
  • whether the coverage meets the minimum value standard,
  • and whether the cost of the coverage to the employee is intended to be affordable based on the employee's wages.  

Most employers will be required to provide the notice because it applies to employers covered by the Fair Labor Standards Act (FLSA). In general, the FLSA applies to employers that have (a) one or more employees who are engaged in commerce and (b) gross annual sales of $500,000 or more. The FLSA is enforced by the DOL.  

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