The United States Department of Labor has postponed until October 1, 2013, a requirement originally slated to go into effect on March 1, 2013, that employers subject to the Fair Labor Standards Act (FLSA) provide certain notices to their employees regarding health insurance exchanges established under the Affordable Care Act (ACA).
The ACA amended the FLSA by adding a section providing that no later than March 1, 2013, in accordance with regulations promulgated by the Secretary of the United States Department of Health and Human Services, employers subject to the FLSA are to provide each current employee, and new employee at the time of hiring, a written notice providing the following information regarding health insurance exchanges:
Informing the employee of the existence of an Exchange, including a description of the services provided by such Exchange, and the manner in which the employee may contact the Exchange to request assistance;
If the employer plan’s share of the total allowed costs of benefits provided under the plan is less than 60 percent of such costs, that the employee may be eligible for a premium tax credit under Title 26 of the United States Code, Section 36Band a cost sharing reduction under Title 42 of the United States Code, Section 18071 if the employee purchases a qualified health plan through the Exchange; and
If the employee purchases a qualified health plan through the Exchange, 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.
However, in January 2013 the Department of Labor advised that the notice requirement would be postponed. Later, in Technical Release No. 2013-02, http://www.dol.gov/ebsa/newsroom/tr13-02.html, it issued temporary guidance that effective October 1, 2013, FLSA-covered employers are required to provide the required notice to all current employees and each new employee at the time of hiring. The guidance further states that for 2014 the Department of Labor will consider a notice to be provided at the time of hiring if it is provided within 14 days of an employee’s start date. The Technical Release also advised that the notice to employees must be provided in writing in a manner calculated to be understood by the average employee. It should be provided in a manner likely to result in full distribution, such as by hand-delivery or first-class mail, but may be provided electronically if the requirements of the Department of Labor's electronic disclosure safe harbor at 29 CFR § 2520.104b-1(c) are met. The technical guidance will remain in effect until the Department of Labor issues regulations or other guidance on the subject.
The Department of Labor has prepared model notices in English and Spanish. One model notice may be used by employers subject to the FLSA who offer a health plan for some or all their employees. It can be accessed on the Department of Labor website athttp://www.dol.gov/ebsa/pdf/FLSAwithplans.pdf. The other model notice may be used by employers subject to the FLSA who do not offer a health plan. It can be accessed at http://www.dol.gov/ebsa/pdf/FLSAwithoutplans.pdf. Spanish versions may also be accessed at the Department of Labor website at http://www.dol.gov/ebsa/healthreform.
If you are an employer subject to the FLSA, make sure that you meet the October 1, 2013 deadline and satisfy the employee notice requirements.