Written by Jimmy Schulz, CPA, CVA, Partner

As part of the Affordable Care Act (ACA), most employers must give their employees written notice of the healthcare coverage they offer as well as information on coverage options available through the Health Insurance Marketplace (the Marketplace) by October 1, 2013even if they do not provide health insurance coverage. Please read through the following FAQs for more information on which employers must provide notice, when they must provide notice, and what information they must include.

Q.         What employers are required to send employee notification?

A.         Most employers will be subject to this requirement as it applies to employers covered by the Fair Labor Standards Act (FLSA). In general, the FLSA applies to employers that have: 1) one or more employees who are engaged in commerce and, 2) gross annual sales of $500,000 or more.

Q.         When must employers provide notice of coverage options?

A.         For current employees, employers must provide notice of coverage options by October 1, 2013. For employees hired after October 1, 2013 through December 31, 2014, notice of coverage options must be provided within 14 days of the start of their employment.

Q.         Is notification required for employees who don’t participate in employer-sponsored healthcare plans?

A.         The notice must be provided to all employees, regardless of plan enrollment status or of part-time or full-time status. A separate notice does not need to be given to dependents or other individuals who are or may become eligible for coverage under the plan, but who are not employees.

Q.         What information must be included in the notice?

A.         The employee notice must be provided in writing and it must be written in a manner calculated to be understood by the average employee. Specifically, the notification must provide employees with information about:

• The existence of the Marketplace.
• Services provided by the Marketplace.
• How to contact the Marketplace for assistance.
• The possibility that employees may lose the employer contribution to any employer-provided health plan if they purchase a plan through the Marketplace.
• The possibility that employees may lose the ability to exclude employer and employee contributions from their income for federal income tax purposes if they purchase a plan through the Marketplace.
• Whether employees may be eligible for a premium tax credit if they purchase a qualified plan through the Marketplace.

The Department of Labor (DOL) has provided two Model Notices (one for employers offering insurance coverage to employees, the other for employers not offering coverage) that may meet the ACA requirements. To access the sample notices, click here. You can also access the notices by visiting the DOL website at www.dol.gov and searching for “health insurance coverage options.”

Q.         Can notice be delivered to employees electronically?

A.         Notification can be provided by first-class mail or electronically. To provide the notice electronically, the employer must meet the same requirements for electronic distribution of ERISA plan disclosures. In general, this means that notices can be sent electronically only to (a) those employees who use a computer as part of their normal job function or (b) those employees who have consented to electronic delivery in a manner that demonstrates they can effectively receive the electronic delivery.

If you are a business owner who is required to send out employee healthcare coverage notification, we encourage you to contact your HR advisor, employee benefits professional, or attorney with any additional questions you may have about your responsibilities under the ACA. You can also speak with a member of our professional team by contacting our office at (402) 423-4343.