As a small business owner, it’s understandable if keeping up with the requirements of the Affordable Care Act doesn’t top your list of priorities. After all, the law’s primary mandate for employers—to offer a certain level of affordable health coverage to employees—applies only to employers that have 50 or more employees. (Even that requirement is being postponed for a year.)
However, at least one upcoming requirement of the ACA applies to most businesses, including yours.
What is it? It’s a little-publicized requirement that nearly all employers provide a notice to their employees advising them that they may be able to obtain health insurance through a federal or state health insurance exchange. The notice isn’t complicated or difficult, but failing to provide the information could subject you to penalties. The first deadline for compliance is Oct. 1, so the time to prepare is now.
Who Should Provide the Notice?
The short answer is that practically all employers are required to provide the notice, regardless of size. You technically have to do so only if you are “engaged in interstate commerce,” but in a border city like Kansas City, that’s not a hard requirement to meet.
The U.S. Department of Labor (DOL) has issued two model notices that employers can use to satisfy their notice obligations. Which model notice to use depends on whether you currently offer health coverage to your employees.
- For employers who currently offer health coverage: www.dol.gov/ebsa/pdf/FLSAwithplans.pdf (Note: Page three is optional.)
- For employers not currently offering health coverage: www.dol.gov/ebsa/pdf/FLSAwithoutplans.pdf
The DOL has actually established two stages for employers to provide the required notice:
- A one-time requirement to provide it to current employees no later than Oct. 1, 2013.
- For employees hired after Oct. 1, 2013, an ongoing requirement to provide the notice to them within 14 days after they start work.
Although this could change with the issuance of further guidance from the DOL, at this time it’s recommended that you provide the notice to employees by first-class mail. And don’t forget to document that you provided the notice and to whom it was provided, as well as when and how. Meeting the notice requirement without being able to prove you’ve done so is no different than not meeting it at all.
Responding to Employee Questions
The model notice from the DOL is written in such a way that the average employee can understand it, but you’re still likely to have some employees come to you for information or advice. Here are some resources for them, and for you if you have additional questions or concerns:
- For employees: the official website regarding coverage through the federal exchange, www.healthcare.gov
- For employers: Technical Release No. 2013-02, www.dol.gov/ebsa/newsroom/tr13-02.html
COBRA Implications
If you have at least 20 employees and administer your COBRA procedures in-house, then you also need to make sure you are using the correct COBRA Election Notice by Oct. 1, 2013. That notice has been updated to include information about the health insurance marketplace as an alternative to COBRA coverage. The new form, revised in April, can be found at www.dol.gov/ebsa/cobra.html.
