AFFORDABLE CARE ACT UPDATE: BY OCTOBER 1, MOST EMPLOYERS MUST PROVIDE CURRENT EMPLOYEES, AND NEW HIRES, HEALTH INSURANCE MARKETPLACE NOTICES September 10, 2013

by Attorney Leslie Lockard
The Law Office of Leslie Lockard, P.C.
P.O. Box 537
Walpole, MA 02081
Tel. 508 850-9800
FAX 508 850-9801
Email: Llockard@leslielockard.com
Website: www.LeslieLockard.com

Employers to whom the federal Fair Labor Standards Act (FLSA) applies-- which is most employers- are required by October 1, 2013 to provide to all current employees and new hires a written Health Insurance Marketplace notice. This notice provides employees information about the existence of public health insurance exchanges or “marketplaces” established by the federal Affordable Care Act (ACA). As you may know, the ACA is intended to expand health insurance coverage to many people previously uncovered, incentivize preventive care and wellness, and decrease over time the cost of medical care and health insurance. Health insurance “marketplaces” allow people to do on-line “one stop shopping” for health insurance, comparing the coverage options and cost of the various options, and determining whether they are eligible for insurance premium tax credits or cost sharing reductions. The notice requirement is timed to coincide with the opening of the new health insurance marketplace, and the open enrollment period for insurance purchased through the marketplace, that begins on October 1.The required marketplace notice also informs employees that if they purchase health insurance through the marketplace, as opposed to being covered under an employer provided health insurance plan, they may lose any contribution towards the cost of health insurance coverage that the employer offers, a contribution which may be excludable from income for federal income tax purposes. Please note that although some requirements of the ACA apply only to employers of 50 or more employees, this marketplace notice requirement applies to most employers, irrespective of their number of employees .

Both the US Department of Labor and the Massachusetts Health Insurance Connector have issued sample insurance marketplace notices that employers can use as templates in complying with this requirement. There are sections on the notices that employers must fill in, so the notice cannot simply be printed out and given to employees, without employer input. Employers may use either the federal or the Massachusetts templates; they do not need to use both.

There are two templates available on the US Department of Labor website, one for employers who offer health insurance to some or all of their employees, and a second version for employers who do not. The first notice listed below is the one intended for employers who offer health insurance to employees; the second notice is intended for those who do not.

http://www.dol.gov/ebsa/pdf/FLSAwithplans.pdf 

http://www.dol.gov/ebsa/pdf/FLSAwithoutplans.pdf 

The Massachusetts Health Insurance Connector, which will serve as an insurance marketplace for Massachusetts people and small businesses, has just issued its own insurance marketplace template notice, which employers may use if they prefer it to the federal templates. The Connector describes their template as a “streamlined, Massachusetts specific template that Massachusetts employers can use to satisfy the ACA marketplace notification requirement” .

The Massachusetts template can be found at

http://bettermahealthconnector.org/wp-content/uploads/2013/08/MAHC_NoticeExchangeACA_Marketplace_082813.pdf

The Massachusetts template includes an optional two page appendix, which can be obtained at

http://bettermahealthconnector.org/wp-content/uploads/2013/08/MAHC_NoticeExchangeACA_OptionalAppendix_082713.pdf 

Some additional Information about the required insurance marketplace informational notices may be helpful to employers:
  1. As stated above, this notice requirement applies to all employers to whom the FLSA applies. In general, the FLSA applies to employers who are engaged in or produce goods for interstate commerce. (The “interstate commerce” definition is generally interpreted very broadly in favor of coverage). The applicable law further states: “For most firms, a test of not less than $500,000 in annual dollar volume of business applies”).
  2. Employers must provide the required notice to all current employees, whether full or part time, and whether or not benefit-eligible, by October 1, 2013. On and after October 1, the notice must also be provided to newly hired employees at the time of hire. During 2014, employers will be deemed to have complied with the new hire requirement as long as the notice is provided to new hires within 14 days of the employee’s employment start date.
  3. The notice must generally be mailed or hand delivered to both current employees and new hires. However, the notice can also be e-mailed if the requirements of the US Department of Labor “electronic disclosure safe harbor”, at 29 CFR 2520.104b-1 are met.
  4. The notice need be sent only to employees, and not their spouses or dependents.
  5. To be able to show compliance, it would be advisable for employers to retain copies of the notices they send, as well as documentation reflecting when and to whom the notices were provided.








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Contact Info

Attorney Leslie Lockard
The Law Office of Leslie Lockard, P.C.
P.O. Box 537
Walpole, MA 02081
Tel. 508 850-9800
FAX 508 850-9801
Email: Llockard@leslielockard.com
Website: www.LeslieLockard.com