Affordable Care Act Compliance Alert
Notice of Coverage Options Must be Provided by October 1, 2013
Under the provisions of the ACA, all employers who are covered by the provisions of the Fair Labor Standards Act must provide a Notice of Coverage Options (“NCO”) to all current employees on or before October 1, 2013. Thereafter, all covered employers must provide the NCO to all newly-hired employees within fourteen days of that employee’s start date.
Who is Required to Provide the Notice?
Any and all employers that are subject to the provisions of the federal FLSA are obligated to provide the NCO to their employees. An employer is obligated to provide its employees with an NCO applies without regard to whether that employer is a “large” or “small” employer.
To Whom Must the Notice be Provided?
The ACA provides that the NCO must be provided to “each employee.” The statute draws no distinction between “full” or “part-time” employees, “permanent” or “temporary” employees, or employees who are participants in the employer’s health plan or non-participants in the employer’s health plan. Consequently, all employees of a covered employer must receive the NCO.
What Must the Notice Say?
Regulations issued by the U.S. Department of Labor indicate that an NCO must contain at least the following elements:
1. Information regarding the existence of the ACA’s Healthcare Exchange, a description of the services provided by the Exchange, and the manner in which the employee may contact the Exchange to request assistance;
2. Notice that, if the employer-sponsored health plan pays less than 60% of the total allowed costs of benefits provided under that plan, and if the employee chooses to purchase a plan through the Healthcare Exchange, then that employee may be eligible for a premium tax credit and/or a cost sharing subsidy under the ACA; and
3. Notice that, if the employee chooses to purchase a plan through the Healthcare Exchange, then the employee may lose the employer contribution to any health benefits plan offered by the employer.
Fortunately, the Department of Labor has prepared a model NCO that employers may use to meet the Notice requirements. Employers that sponsor a health plan for their employees should use the form found at http://www.dol.gov/ebsa/pdf/FLSAwithplans.pdf
Employers who do not offer a health plan to their employees should use the form found at http://www.dol.gov/ebsa/pdf/FLSAwithoutplans.pdf
Before sending the NCO, each employer should confer with its insurance agent or company. In many cases, the insurance agent or company will already be aware of the notice requirements of the ACA and will be making preparations to meet those requirements. However, in that case, it is the employer’s responsibility to ensure that the NCO is being provided to all employees – not just those employees who are participants in the employer’s health benefit plan.
*The above information was shared in conjunction with Law Firm of Conway, Olejniczak & Jerry S.C. www.lcojlaw.com P: 920-437-0476
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