Advising with Vision

September 11, 2013

October 1st Deadline Approaching
Employee Notices of Coverage Options

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The Patient Protection and Affordable Care Act (Affordable Care Act) requires all employers that are covered by the Fair Labor Standards Act (FLSA) to notify their employees about the coverage options available to them through the Health Insurance Marketplace (Marketplace). The Department of Labor (DOL), Health and Human Services (HHS) and the Treasury have been tasked with developing the Notice to Employees of Coverage Options (Notice) for employers to provide to employees. According to the temporary guidance issued by the Department of Labor in Technical Release 2013-02 (the Release) on May 8, employers are required to provide the notice to all current employees by October 1, 2013, and to all new employees hired after October 1, 2013 within 14 days of the employee's start date. 

Who must provide the notice? 
Employers subject to the Fair Labor Standards Act (“FLSA”) who:

  • Generate revenue in excess of $500,000; 
  • Employ one or more employees; 
  • Offer insurance or do not offer insurance.

The guidance specifically includes employers that are hospitals, resident care institutions, schools, state and local government agencies.

Who must receive the notice?
  • Both full-time and part-time employees; 
  • All current employees whether or not they have health plan coverage or are eligible for such coverage; 
  • Dependents and former employees do not need to be notified.

When must the notice be sent?

  • Current employees hired on or before October 1, 2013 must be provided by October 1, 2013.
  • Employees hired after October 1, 2013 must be provided within 14 days of the employee's hire date.

How must the notice be delivered? 

  • Free-of-charge written notice; 
  • First-class mail or electronically (the electronic notice must comply with the DOL’s electronic disclosure requirements). 
What must the notice say? 
  • Inform employees of the existence of the Marketplace, a description of services provided by the Marketplace, and contact information for the Marketplace; 
  • Notify the employee that they may be eligible for a premium tax credit or other cost-sharing reduction; 
  • That if the employee purchases health coverage through the Marketplace, the employee may lose the employer tax-free contributions.

For your convenience, we have included links to the Department of Labor’s model notices: 

For employees offering health coverage, Part B of the model notice requires very specific information about the health coverage provided.  The employer must include a check box to indicate whether the coverage is "affordable" or provides "minimum value" as defined by the IRS Code.  Depending on the types of coverage offered, employers may need to provide multiple versions of Part B.  Additionally, employers providing health plan coverage may voluntarily complete page 3 of the model notice to help employees understand their coverage choices.

If you would like assistance preparing Part B of the forms or identifying what information is to be provided and to whom, please contact your Mueller Prost PC advisor at 314.862.2070.

We hope you find this information to be valuable. As always, we are here to help. If we can provide assistance or answer questions regarding this issue or on any other topic, please feel free to contact us at 314.862.2070.


Sincerely, 

Michael J. Prost, CPA/ABV/CFF, CVA, ASA | Vice President
314.862.2070 | mprost@muellerprost.com

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