October 1 Date for Affordable Care Act Notice Looms Despite Employer Mandate Delay

As the new Health Insurance Marketplace mandated by the Affordable Care Act (ACA) prepares to open on Oct. 1, 2013, employers subject to the Fair Labor Standards Act are reminded to distribute a notice of available coverage options in the Marketplace (i.e., Marketplace Notice) to employees.  The notice should be distributed to current employees by Oct. 1 and to new hires within 14 days of the employee’s start date.  This mandate is unaffected by the Administration’s decision to delay enforcement of ACA’s employer mandate. Earlier in the year, DOL issued guidance for employers, including a model notice and new model COBRA election notice.  The new COBRA election notice includes information about coverage available through the Marketplace. The Marketplace Notice must be distributed to all employees, regardless of their enrollment status or their part-time or full-time status.  Spouses and dependents are not required to receive a separate notice.  In addition, the notice must be provided regardless whether or not  a large employer is subject to the play-or-pay mandate or whether it offers grandfathered or non-grandfathered health coverage (or no coverage at all).  Notices must be provided by first-class mail or electronically under the DOL’s electronic disclosure safe harbor rules. Employers should pay close attention to the notice requirements to avoid common pitfalls, such as:

• My insurance provider is taking care of the notice requirement for me.  Be careful!  Employers are required to send the notice to all employees.  You should work with your provider to make sure all employees, not just plan participants, receive the notice.
• I just looked at the DOL model notice, and we don’t have time to fill out individualized information for every employee.  Don’t worry!  The individualized information requested on page 3 of the DOL model notice for employers who offer health coverage is optional.  See the instructions included in the model notice for more details.
• I’m sure this requirement doesn’t apply to my small company.  Don’t be so sure!  As detailed above, the requirement applies to nearly all employers, large or small.

For employers that contribute to a multiemployer fund, it may be necessary to request information from the fund administrator for inclusion in the notice.  A sample request letter, along with other resources, is available on AGC’s ACA compliance assistance website at http://www.agc.org/healthcarereform.   For additional information on the notice requirements, click here. Employers that do not provide the notice will not be fined or penalized, according to a September 11 announcement by the U.S. Department of Labor (DOL).  However, because the notice requirement is a statutory mandate, AGC advises employers considering noncompliance to consult with their attorneys in a timely manner. Editor’s note:  Contributions to this article were made by Tabatha George.   Tabatha George is an associate with the law firm of Fisher & Phillips LLP.  She specializes in employee benefits, including retirement and welfare plans and healthcare reform.