If your company has at least one employee, and is subject to the Fair Labor Standards Act, then as an employer, the new requirements of the Affordable Care Act apply to you. As of October 1st, 2013, if a company makes at least $500,000 in revenue each year, it is required to notify all of its employees, both full and part time, about the new health exchange established to provide health insurance.
Some reports have stated that companies that fail to comply with these new requirements are subject to up to $100 daily fines, but the US Department of Labor has denied that businesses will be fined if they fail to notify their employees of the healthcare changes. Whether you’ll be subject to fines or not, it’s wise to act quickly if you haven’t already. These notices are also supposed to be sent to any new employees within 14 days of their hire date.
Government Health Exchange Notice Templates
The US Department of Labor has published insurance exchange notice templates; one model is for employers that offer a health plan to some or all employees, and the other is for employers that do not offer a health plan to any employees. There are certain requirements of these exchange notices, including the information they convey and that they must be able “to be understood by the average employee.”
If an employer offers health coverage, and chooses to use the government-provided template, the health exchange notice must be customized with the following information:
- demographic information about the employer
- whether or not it provides minimum value (which means it covers 60% of the total benefits)
- and if it’s considered affordable (which means it costs the employee 9.5% of his or her household income or less)
Additionally, the health exchange notice needs to list any waiting periods for coverage, how much the coverage will cost, and if there will be any changes made to the preexisting coverage.
If an employer does not offer health coverage, there is another government-provided health exchange notice form that can be used.
In either case, if employers choose to create their own health exchange notice letters, they must inform the employee of:
- the existence of the exchange, its contact information and what services it offers
- the potential eligibility for a premium tax credit to assist the employee in getting health insurance, if the employer’s health plan (if any) does not meet the minimum value requirement
- the fact that if the employee chooses to get coverage through the exchange, the employee will lose the employer’s contribution (if any) toward health benefits (as a result of receiving the tax credit)
As an employer, whether you choose to use the government-provided template, or decide to create a health exchange notice of your own, it’s wise to consult a professional, such as the team at DeFreitas and Minsky LLP, to make sure you’re only providing the minimum requirements of the notice. The template has been reported to offer information beyond the minimum of what’s required, and that may leave employers exposed in certain areas they needn’t be. Make sure you know what is required of you, so that you protect yourself and your company.