Under the Fair Labor Standards Act (FLSA), employers that fall under FLSA are required to provide written notice to each employee informing them of:
- The existence of the Health Insurance Marketplace, sometimes referred to as the Exchange, including services provided, the contact information for assistance and information about the coverage options available through the Marketplace.
- If the employer’s cost share for the benefits is less than 60% of the costs of the benefits, an employee may be eligible for a premium tax credit if coverage is bought by the employee through the Marketplace.
- If the employee buys a qualified Marketplace plan, the employee may lose employer contributions, if any, and all or part of employer contributions may not included as income for tax purposes.
Employer exchange notices are required to be provided to each new employee, must be written in a manner that is easily understood and must be provided within 14 days of the start date. The notice may be provided by mail or electronically as long as the Department of Labor safe harbor requirements for electronic disclosure are satisfied.
Originally, this requirement forced employers to supply the Marketplace notice to all employees by October 1st. While this was an original compliance date, this notice is no longer required to be supplied on an annual basis but rather within 14 days of hire.
Additionally, in response to the availability of the Health Insurance Marketplace, the Department of Labor has issued updated model notices which provide marketplace exchange information and options available to qualified beneficiaries under the Consolidated Omnibus Budget Reconciliation Act (COBRA), allowing those individuals to have information to consider and compare coverage alternatives.
At this time, there are no penalties for failure to provide the Marketplace notice.
This content is being provided as an informational tool. It is believed to be accurate at the time of posting and is subject to change. It is recommended that plans consult with their own experts or counsel to review all applicable federal and state legal requirements that may apply to their group health plan. By providing this information, Meritain Health is not exercising discretionary authority or assuming a plan fiduciary role, nor is Meritain Health providing legal advice.