By Raphael S. Moore
Many employers will be required by Oct. 1 to inform their employees about the existence of state health exchanges under the new Patient Protection and Affordable Care Act, even though they may not be required to offer health coverage under it.
Does it apply to me?
The notice requirement applies to all employers that are covered by the Fair Labor Standards Act. That generally means those with at least $500,000 a year in gross receipts and that engage in, or produce goods for, interstate commerce (i.e., having any regular contact with interstate commerce, regardless of how small, including purchasing equipment and supplies from other states, servicing clients across state lines, selling out of state, etc.)
So it applies to me. Now what?
If the notice requirement applies to you, you need to provide, by Oct. 1, a one-time written notice to all current employees (full-time and part-time, and regardless of whether you are providing them health benefits) about state health exchanges. You also will need to give notice to all future employees within 14 days of hire.
In addition to informing employees about the exchanges, the notice lets them know that depending on their income and what coverage you may offer them, they may be able to get lower-cost private insurance through the new marketplace. It also notifies employees that if they buy marketplace insurance, they could lose any contributions you may be making to their health benefits.
Where do I get the notices?
Although you can provide your own notice, the Department of Labor has provided two model notices to help employers comply with this requirement. One version is for employers who do not provide health plans, and one is for employers who do offer health plans to at least some employees. Both can be downloaded at www.dol.gov/ebsa/healthreform/index.html.
How do I give the notice?
The easiest way to comply is to send the notice to employees by first-class mail (no need for registered or certified mail). You also can send the notice electronically, but then you will need to comply with the Department of Labor’s electronic disclosure rules — see the detailed regulations at 29 CFR 2520.104vb-1(c).
So what if I don’t comply?
Per the Department of Labor, the regulations provide no penalty for failure to comply. However, the Patient Protection and Affordable Care Act does have a $100 per day general “non-compliance” penalty that applies to everything from violating non-discrimination rules, to notice violations like the ones discussed here.
In effect, the act states that you have 30 days to correct any non-compliance from the date of discovery, or else you have to self-report a $100-a-day penalty on an IRS form. Whether it will it be enforced, and how, remains to be seen, but considering how easy it is to comply with the notice requirement, and considering the magnitude of potential penalties, the best approach for most is to simply fill out the appropriate notice, and mail it out.
If you need specific advice as to your own circumstances, research the law or speak with a trusted attorney.
— Raphael Moore practices law in downtown Davis. He may be reached at email@example.com