New Health Insurance Notices – October 1, 2013 Deadline for Compliance

October 1st, 2013 is the deadline for certain employers to provide a document to their employees regarding coverage options which may be available through the Patient Protection and Affordable Care Act – also known as “Obama Care”. The October 1st deadline is only about providing notice to employees. It does not mean that a company must offer medical coverage under the Affordable Care Act – those rules have been postponed by the government until January 1st, 2015.

Many employers will be required to provide the notice to their employees, even if they provide no health insurance, or have less than 50 employees and may not be subject to the Affordable Care Act employer mandates effective in 2015.

The information below is to help you determine whether or not your company must provide the notice to your employees regarding the Health Insurance Marketplace by October 1st, 2013. The Health Insurance Marketplace is a centralized website where anyone can compare private health insurance options. The Marketplace for Colorado is found at the Connect for Health Colorado website: (http://www.connectforhealthco.com/).

1. Which types of businesses must provide the notice to employees?

Private businesses which fall under one of the following:

a. A company with an annual dollar volume of sales or receipts of $500,000.00 or more.
b. A pre-school; elementary or secondary school or institution of higher education (e.g. college); or a school for mentally or physically handicapped or gifted children (for profit or non-profit)
c. A hospital; or institution primarily engaged in the care of the sick, aged, or the mentally ill or developmentally disabled (for profit or non-profit)

If your business is in one of these categories, then you must provide notice of healthcare coverage options to all full-time and part-time employees by October 1, 2013. Beginning October 1st, 2013, businesses that meet the above criteria must also provide this same notice within fourteen days of a new employee’s hire date.

2. What kind of notice must a company provide?

The US Department of Labor has provided two notice letters which businesses may use, one for companies that do provide health insurance, and one for companies that do not.

A. Form Notice – for companies that do provide health insurance.
http://www.dol.gov/ebsa/pdf/FLSAwithplans.pdf

B. Form Notice – for companies that do not provide health insurance.
http://www.dol.gov/ebsa/pdf/FLSAwithoutplans.pdf

We have attached copies of both notice letters, or you can go to the links above to retrieve the form notices in electronic format.

If your company does not offer health insurance, you need only add information in Part B (second page) of the form notice letter, i.e. employer name, address, EIN, and the name of a contact person. The first page of the notice is already filled out covering the general information required in the notice.

If your company does provide health insurance, the form notice requires additional information regarding health plan eligibility criteria for your employees and coverage for dependents. Additionally, you will have to provide information as to whether your health insurance coverage meets the federal government’s minimum value standard – which is a formula set forth in the Internal Revenue Code (1). Your health insurance carrier or your insurance broker should be able to get you this information and assist in the calculation. Please note that the notice is purely for informational purposes – you are simply providing this information to the employee so that the employee has it if he or she decides to shop for coverage in the Marketplace.

3. How does a company send the notice?

Notices may be sent to each employee by first-class mail, to their home address, or the notices may be sent by e-mail as long as you meet the Department of Labor’s electronic safe harbor rules (2). Note: you are not required to send this notice to dependents – only to employees.

If you have any questions regarding compliance with the new notice requirement, please do not hesitate to call us at 303-798-2525.

Footnotes:
(1) IRC § 36B(c)(2)(C)(ii), a plan fails to provide minimum value if “the plan’s share of the total allowed costs of benefits provided under the plan is less than 60 percent of such costs.” A program for calculating the minimum value is found at http://www.cms.gov/cciio/index.html

(2) 29 CFR 2520.104b-1(c). The rule can be found at http://www.ecfr.gov/cgi-bin/text-idx?c=ecfr&rgn=div5&view=text&node=29:9.1.3.3.3&idno=29#29:9.1.3.3.3.6.10.1