You asked: “I have been hearing about an Affordable Care Act letter that small business owners have to provide to our staff before October 1, 2013. Where can I find more information about this?”
Dear Small Business Owner,
In our May 23, 2013 blog post, Alex alerted readers to a few Affordable Care Act (ACA) requirements. One of them is quickly coming due, as you have heard.
Though the employer mandate (requiring employers to “pay or play”) of the ACA was delayed until 2015, the individual mandate is going to kick in as of 2014. Employers must provide a “Notice to Employees of Coverage Options” to ALL of their employees (full and part-time, regardless of whether they are enrolled in an employer-sponsored health plan or not) no later than October 1, 2013. Any employee hired on or after October 1, 2013 must be provided with the notice at the time of hiring.
This Department of Labor (DOL) notice gives employees contact information for the Health Insurance Marketplace and describes the services provided. It also informs the employee of certain conditions that apply if the employee purchases a qualified health plan through the Marketplace; this includes possible eligibility for a premium tax credit and/or possible loss of the employer contribution (if any) to any health benefits plan offered by the employer. In addition, employees must be notified that all or a portion of the employer’s contribution may be excluded from income for federal income tax purposes.
The bad news is that here is yet another federally-required form that you must provide to your employees. But, there is good news! The DOL provides model notices that you can use, so you don’t need to create your own. You will need to complete a few spaces on the form before sending them out. The DOL provides separate notices for employers who do not offer a health plan and for employers who offer health insurance coverage to some or all of their employees. You can access the notice you need by clicking on the highlighted text or by visiting www.dol.gov/ebsa/healthreform/. This notice must be provided in writing, either via air mail or electronic mail. Posting the notice on the company intranet or on a bulletin board is NOT sufficient.
In addition to the new Affordable Care Act notices, the DOL has also revised the standard Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) Model Election Notice. As you already know, employees who lose group health insurance due to a “qualifying event” may become eligible for COBRA continuation of benefits. What has changed is that now under ACA, individuals who are qualified for COBRA coverage may also be eligible for a premium tax credit to help defray some or all of the costs of coverage in plans offered through the Marketplace. The new COBRA notice has been modified accordingly and can be accessed by visiting www.dol.gov/ebsa/cobra.html and clicking on “COBRA Model Election Notice” under the “For Employers” list.
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