Once upon a time, there was confusion in the Kingdom. I have been working on the Affordable Care Act for months now and every time I’m ready to write about it, the rules change again. We are almost there, however, as the Exchanges go live October 1st. And you ask, “What does that mean for me?”
It means different things depending on who you talk to about the subject. Eeyore thinks it’s the end of the world as we know it, Tigger is so excited that healthcare will be abundant and Owl is just reading and trying to make sense of it all. I’m trying to be more Owl and less Eeyore. Let me start by saying that the spirit of the law is brilliant. I do believe that everyone should have access to insurance and that the system needed to be fixed. However, we have to work through the kinks in real-time, and the next 90 days will give us clear picture of what the next year will entail.
So, what do you need to do now to be prepared for the coming changes? Employers subject to FLSA (pretty much everyone) need to send Notices of Health Insurance Marketplace to employees before October 1st. Notices need to go out to all employees regardless of full-time or part-time status or participation in the plan. Even if an employer does not provide insurance, notices need to be given to employees. Are there other times employees need to receive notices? Of course, if there is a mid-year plan renewal the notices need to go out on October 1st this year and 60 days before any changes are made to the plan. New employees should receive the notice upon hire.
The Department of Labor announced on September 11th that they would not fine employers for failing to give out notices. That being said, it’s very alarming to hear many employers are now being advised that notices are optional. I completely disagree. So does Keith R. McMurdy, a partner at law firm Fox Rothschild LLP, who commented in a posting on his firm’s Employee Benefits Legal Blog that “Section 18B of the FLSA clearly states that any employer subject to the FLSA ‘shall provide’ written notice to current and future employees and that the DOL’s Technical Release No. 2013-02, issued in May 2013, states that Section 18B of the FLSA generally holds that an applicable employer ‘must provide’ each employee with a notice… Words like ‘shall’ and ‘must’ usually mean that if I don’t do it, I get burned. So I am still recommending that employers comply with the notice requirement. Why? I can almost guarantee that if you send the notice, you won’t face a penalty for not sending it. But if you don’t send one, well, I still say all bets are off.” Law firm Mazursky Constatine LLC cautions, “A blatant disregard of the requirement to provide the Exchange Notice could expose an employer to lawsuits if one or more employees are unhappy with their coverage situations.” So if you don’t believe the Queen, believe the lawyers, send out your notices- Health and Human Services didn’t create them for fun!
What information do I need for the notices? The Department of Labor has kindly provided us with Sample Notices for both employers providing insurance and employers not providing insurance. You will also need to add your company information, details on your current plan, and, if you are renewing in January, the details of the 2014 plan. These notices provide the information on http://www.healthcare.gov directing employees to the Exchanges and providing some information on the rules. It’s important that employees realize if they purchase insurance from the exchange they may be subject to losing the employer contribution. I would also suggest you attach a Schedule of Benefits for your plans.
There is a lot of information out there, and it’s important to keep up and share with your employees. Employees should know they will need their financial information handy when researching plans on the Exchange. Once the Exchanges are released, we will have a better understanding of the process and rates for the new year. I look forward to updating everyone after October 1st.
What has your company done to prepare for October 1st?
For more resources on the Affordable Care Act visit: