PYA reminds small business owners of October 1 health coverage notification requirement

PYA(EDITOR’S NOTE: Pershing Yoakley & Associates, P.C. {PYA} is the sponsor of teknovation.biz. As a service to our small business readers, we are publishing a recent notice that PYA provided its clients about the employer actions required by October 1 for health coverage notification.)

Beginning January 1, 2014, individuals and employees of small businesses will have access to affordable healthcare coverage through a new, competitive private health insurance market called the Health Insurance Marketplace or “health exchange.” Certain employers must provide written notice to employees about health insurance coverage options available through the Marketplace.

The Employee Benefits Security Administration has provided the following guidance on the notice requirement.   

Who must provide notices? 

Notices must be provided by any employer to which the Fair Labor Standards Act applies.  Generally, this means an employer that employs one or more employees who are engaged in, or produce goods for, interstate commerce. For most firms, this rule does not apply if they have less than $500,000 in annual dollar volume of business.   

Who must receive notification?  

Employers must provide a notice to each employee, regardless of part-time or full-time status or plan enrollment status (if applicable). Employers do not have to provide a separate notice to dependents or other individuals who are not employees, even if they are eligible or may become eligible for coverage under any available plan. 

What is the format of the notices and what information should they contain? 

The notice must be provided in writing and designed so that an average employee can understand it.  The communication must include information regarding the existence of a new Marketplace, as well as contact information and a description of the services provided by the Marketplace. In addition, the notice must: (1) inform the employee that he or she may be eligible for a premium tax credit if the employee purchases a qualified health plan (“QHP”) through the Marketplace; and (2) include a statement informing the employee that if he or she purchases a QHP, the employee may lose the employer contribution (if any) to any health benefits plan offered by the employer, and that all or a portion of that contribution may be excludable from income for federal income tax purposes.  

What is the timing and delivery of notices?   

Beginning October 1, 2013, employers must provide the notice to each new employee at the time of hiring.  Employers also must provide the notice no later than October 1 to current employees hired prior to that date.  For 2014, a notice is considered to be provided at the time of hiring if it is provided within 14 days of an employee’s start date.

Guidance for employers and model notices are available on the Department of Labor website. 

If you have questions concerning the healthcare notice requirements, contact Doug Yoakley or Janie Nolan at PYA, (800) 270-9629.

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