Posted by Deerfield Advisors Insurance Agency on October 22, 2013

On May 8, 2013, the U.S. Department of Labor (DOL) published 2013-02 Technical Release to provide employers guidance on the provision of the Patient Protection and Affordable Care Act (PPACA) that requires employee notification of health care insurance coverage options. Only employers that employ one or more individuals and who are engaged in, or produce goods for interstate commerce are subject to FLSA requirements. The FLSA generally does not cover businesses with less than $500,000 in annual dollar volume of business. However, we recommend compliance with FLSA guidelines in this case, just to be on the safe side.

Notice Requirements
Beginning today, October 1, 2013, employers are required to notify each employee of their coverage options under the new law. In addition, starting in 2014, employers will have 14 days from an employee’s start date to provide insurance coverage options. The notice must be written in language that can be understood by the average employee, and may be provided via first-class mail or sent electronically.

Model Notices
With Technical Release 2013-02, DOL provided two model notices that satisfy the content requirements – one for employers that do not offer a health plan, and one for employers that do offer a health plan to some or all employees. Employers may modify the model language as long as it meets the content requirements, but we don’t recommend it.

Non-Compliance Fee Waived ($100 Per Day, Per Employee Fine for Non-Compliance)
Business owners will not be fined if they don’t provide notification to their employees about the new Health Insurance Marketplace this year per notice on the SBA website, Small Business Administration. However, as blogger Shawn Perry writes on the SBA website comments section:

“The lack of penalties does not translate into a lack of consequences. Plan sponsors still have a fiduciary obligation to be forthcoming with plan participants and beneficiaries. Employees can sue employer and claim damages if they miss the open enrollment period just because employer failed to provide the notice on time.”

And John Elf, another blogger, continues with a good point of his own:

“The monetary penalty has been waved off but notifying is still a requirement – so – there is very much a possibility of some penalty (whether monetary or other) in case of non-compliance.”

Deerfield Advisors agrees with both of these comments.

Step By Step Instructions Make It Easier
Our friends at Benefit Mall have created step by step instructions that will walk you through the requirements. They caution, however: “This information is intended to be a reference point to help you keep your company in front of the Patient Protection and Affordable Care Act’s (PPACA) implementation procedures,” specifically – PPACA section 1512.

Tardy Notices
If you are not able to get the notice out immediately, I don’t think it will be the end of the world. I would think (and this is only our opinion) being no more than, say, one week tardy will not violate the spirit of a “good faith effort to comply,” especially in view of the fact that there will not be a monetary penalty.

The Deerfield Team
800.233.6428
j@deerfieldadvisors.com

DOL Issues Guidance on Employer Notification Requirements

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