Notifying your employees of PPACA coverage

If you're scratching your head about Patient Protection and Affordable Care Act (PPACA or ACA) provisions affecting your business, you're likely not the only one. Starting October 1, open enrollment begins for the Jan. 1, 2014 PPACA mandated Health Insurance Marketplace, previously known as the Exchange. All employers must notify their existing employees of this Marketplace no later than October 1, 2013, regardless of open enrollment or employer coverage. As of October 1, any new employee should be given the notice immediately upon hire.

Why do I need to notify my employees of upcoming PPACA changes?

According to the Fair Labor Standards Act (FLSA) that's part of PPACA, all employees must be notified of coverage options available to them in the Marketplace. Notices must be provided to new hires within 14 days of their start date.

What should I include in the notice?

According to the Department of Labor (DOL), a written notice should be given to all employees:

1. "Informing the employee of the existence of the Marketplace (referred to in the statute as the Exchange) including a description of the services provided by the Marketplace, and the manner in which the employee may contact the Marketplace to request assistance;

2. If the employer plan's share of the total allowed costs of benefits provided under the plan is less than 60 percent of such costs, that the employee may be eligible for a premium tax credit under section 36B of the Internal Revenue Code (the Code) ift he employee purchases a qualifed health plan through the Marketplace; and

3. If the employee purchases a qualifed health plan through the Marketplae, the employee may lose the employer contribution (if any) to any health benefits plan offered by the employer and that all or a porition of such contribution may be exluable from income for Federal income tax purposes."

The notice should go out to each individual employee whether this employee works full-time or part-time. It should be written in a way that is understandable to the "average employee," the DOL added.

When should I notify my employees by?

IMPORTANT: If you are an employer subject to FLSA and haven't notified your employees about the Health Insurance Marketplace, you must do so prior to October 1. The notification applies even if your employees are already covered by a company health plan and regardless of your open enrollment date.

The DOL has provided a model notice to help you understand what should be communicated to your employees.

FSAstore.com reviews and provides guidance on any new regulations issued. Visit our blog frequently to keep up-to-date on the latest impacts of PPACA.