What is the ACA Notice Requirement?
The Affordable Care Act includes an amendment to the Fair Labor Standards Act (FLSA) that requires businesses that are covered under the FLSA to inform employees about 1) the existence of the new health insurance exchanges: and 2) the health care benefits currently offered. Notice is required by October 1, 2013, and to future employees within 14 days of hire.
The Department of Labor Technical Release 2013-2 has more detailed guidance on complying with the requirement.
As a small business owner do I have to comply with this requirement?
Any business that generates more than $1,000 in annual revenue and employs at least one person falls under the FLSA and must comply with the notice requirement.
What is the purpose of the notice requirement?
Enrollment in health care exchanges under the ACA opens Oct. 1, 2013. Any person may “shop” the so-called “Marketplace” at Healthcare.gov, but to begin the process a person must submit certain information that is provided by their employer in the notice. This information will have a direct impact on whether the person is eligible for the tax credit under the ACA for purchase of their own or dependent coverage. That is critical to determining the “cost” from the perspective of the employee.
How do I know what to put in the notice?
The U.S. Department of Labor has created two model notice requirements forms, one for employers who provide health coverage, and one for those who don’t. If you complete these accurately and provide them to your employees, you will satisfy the notice requirement.
An employer can also create its own notice based on the guidance in Technical Release 2013-2.
What does it mean when it asks “does the plan meet the minimum value standard”?
The plan meets the minimum value standard if it covers 60% or more of the total benefit costs. If the plan meets this standard, the employee will not be eligible for a tax credit for his/her own coverage.
Do I have to comply if I do not provide my employees health coverage?
Are there penalties for non-compliance?
No. The issue of penalties is not addressed in the law, but the Department of Labor has stated in its Q&A that “If your company is covered by the Fair Labor Standards Act, it should provide a written notice to its employees about the Health Insurance Marketplace by October 1, 2013, but there is no fine or penalty under the law for failing to provide the notice.”