Affordable Care Act (Obamacare) – Notice of Coverage Options

Obamacare ahead signWith an October 1, 2013 deadline, time is running out to notify employees of the Health Insurance Marketplace and health insurance coverage options.

While the U.S. Federal government has extended the deadline on many items in the Affordable Care Act (ACA), the deadline to notify employees of healthcare options has not changed.

We’ve attempted to outline the requirements as we understand them, mostly by quoting reputable sources.  Keep in mind, we are not legal experts, we simply make mail (but try to be knowledgeable about many topics in order to be a good resource to our customers).

The Requirement:

“Section 18B of the Fair Labor Standards Act (FLSA), as added by section 1512 of the Affordable Care Act, generally provides that, in accordance with regulations promulgated by the Secretary of Labor, an applicable employer must provide each employee at the time of hiring (or with respect to current employees, not later than March 1, 2013), a written notice:…”

http://www.dol.gov/ebsa/newsroom/tr13-02.html

The Deadline:

“With respect to employees who are current employees before October 1, 2013, employers are required to provide the notice not later than October 1, 2013. The notice is required to be provided automatically, free of charge.”

http://www.dol.gov/ebsa/newsroom/tr13-02.html

Who Must Comply:

“For most firms, a test of not less than $500,000 in annual dollar volume of business applies.  The FLSA also specifically covers the following entities: hospitals; institutions primarily engaged in the care of the sick, the aged, mentally ill, or disabled who reside on the premises; schools for children who are mentally or physically disabled or gifted; preschools, elementary and secondary schools, and institutions of higher education; and federal, state and local government agencies.”

http://www.dol.gov/ebsa/newsroom/tr13-02.html

The Content:

The notice to inform employees of coverage options must include information regarding the existence of a new Marketplace as well as contact information and description of the services provided by a Marketplace.“.

*See http://www.dol.gov/ebsa/newsroom/tr13-02.html for complete requirements.

Sample Notice of Coverage Letters:

If you need some help on creating your own employee notification, the U.S. Federal government has provided some options that you can use. We have linked to them below (will open a fillable pdf for you to modify):

Does it need to be mailed via Certified Mail?

While many of the requirements about notification are crystal clear, like the deadline, some details are open to interpretation.  The Department of Labor FAQ  does not specifically mention the need for certified mail, but it does imply that you’ll need to know that employees received the written notice.

According to Bajaria Law:

“Although there is no requirement to prove that employees received notice, it may be a good idea to have the employees sign and acknowledgement form or send them the notice via certified mail.”

According to G. R. Reid Associates, LLP:

“The Department of Labor is recommending employers provide the forms either electronically or by certified mail to ensure receipt.”

Failure to Notify:

While we couldn’t readily find the fines and penalties that will be imposed for failure to comply with the notification requirement on the Department of Labor website, we know that the government often uses fines and penalties to achieve compliance.  We did find other experts who believe fines could be assessed.

According to the blog of Keyt Law of Arizona:

“An employer who fails to give the required notice to all employees will be subject to a $100-per-day fine.”

According to an article by Raphael Moore from MyTrustedLawyer.com:

“…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.”

There are other potential costs of non-compliance, according to a blog post by Bracewell & Giuliani LLP:

“Further, employers who fail to send the required notice could potentially open themselves up to claims by employees who suffer damages as a result of such failure.”

How do I mail my notifications quickly?

With time running out, you can fill out the PDF form above or create your own letter and load it into the LetterStream website along with your mailing list, and we will certainly work to get them out the door within 24 hours. If you need a guarantee on that, choose the expedite or rush option and we will move your mailing to the top of the stack.