On January 24, 2013, the United States Departments of Labor, Health and Human Services, and the Treasury published a new installment of their "Frequently Asked Questions about Affordable Care Act Implementation" series. This FAQ is significant because it delays employers' notice requirements concerning health insurance coverage options available through health insurance exchanges ("Exchanges"). As written, Section 1512 of the Affordable Care Act (which amends Section 18B of the Fair Labor Standards Act) requires an applicable employer to provide each employee at the time of hiring (or with respect to current employees, not later than March 1, 2013) a written notice:
- Informing the employee of the existence of Exchanges including a description of the services provided by the Exchanges and the manner in which the employee may contact Exchanges to request assistance;
- That the employer plan's share of the total allowed costs of benefits provided under the plan is less than 60 percent of such costs, the employee may be eligible for a premium tax credit under section 36B of the Internal Revenue Code (the Code) if the employee purchases a qualified health plan through an Exchange; and
- That the employee purchases a qualified health plan through an Exchange, 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 such contribution may be excludable from income for Federal income tax purposes.
Section 18B requires the Department of Labor ("DOL")
to promulgate regulations outlining for employers the specific
notice requirements. DOL will postpone the effective date of
the notice requirement to provide "a smooth implementation
process including providing employers with sufficient time to
comply" and to allow it to select an applicability date that
ensures employees receive the information at a meaningful
time. DOL expects that the timing for distribution of notices
will be the late summer or fall of 2013, which will coordinate with
the open enrollment period for Exchanges.
Butler Snow has formed an Affordable Care Act task force, led by Nashville attorney Michael Sheridan, to assist employers in compliance. If you have questions concerning Affordable Care Act requirements and its impact on your current policies and procedures, please contact Mr. Sheridan or the Butler Snow Labor and Employment attorney with whom you normally work.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
