Update: Health Exchange Notification Delay Requirement for Employers

IRS RegulationsAs we shared with you on January, the Department of Labor (DOL) recently announced that employers will not be held to the March 1, 2013 deadline.  Here is additional information you may find helpful.

What You Need to Know

Section 18B of the Fair Labor Standards Act (FLSA) requires that employers notify their employees of coverage options available through the Exchanges. This requirement was initially to take effect on March 1, 2013. On January 24, 2013, the Department of Labor (DOL) released an FAQ which delayed the implementation date to late summer or fall of 2013 in order to give employers sufficient time to comply and to align with the Exchanges’ open enrollment period.

Background Information

The ACA added a section 18B to the FLSA that requires applicable employers to provide each employee at the time of hiring and current employees by the date to be specified by DOL, a written notice that:

  1. Informs the employee of the existence of Exchanges including a description of the services provided by the Exchanges, and the manner in which the employee may contact Exchanges to request assistance;
  2. 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 section 36B of the Internal Revenue Code (the Code) if the employee purchases a qualified health plan through an Exchange; and
  3. If the employee purchases a qualified health plan through an 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.

Employers are responsible for issuing this notification; this is not a requirement of the Health Plan carries and they are not expected send communications on behalf of employers.

Click here to view or download the FAQ ACA Implementation document.
Click here to view or dowload the FAQ ACA Implementation Update Part XI

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