Patient Protection and Affordable Care Act Notices have NO Penalty Imposed on Employers

by | Nov 18, 2013 | HR Legislative Updates

penalty_for_employers_obamacareIn a surprise announcement, the Department of Labor (DOL) announced there will be no penalty imposed on employers that fail to distribute to workers a notice about available coverage under state- and federal-government-run health insurance exchanges (collectively referred to by the government as the “health insurance marketplace”), scheduled to launch in October 2013.  The Patient Protection and Affordable Care Act (PPACA or ACA) and Fair Labor Standards Act (FLSA) added to the labor statute by the PPACA, requires employers that are subject to the FLSA to provide all their employees by Oct. 1 of each year (the traditional start of the annual open enrollment season for employee health plans), and all new employees at the time of hiring, a written notice informing them of the following:

  • The existence of the government-run health care exchanges/the marketplace, including a description of the services provided and the manner in which employees may contact an exchange to request assistance.
  • 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, workers may be eligible for a premium tax credit under  of the Internal Revenue Code if they purchase a qualified health plan through an exchange.
  • Employees who purchase a qualified health plan through an exchange may lose their employer’s contribution to any health benefits plan the organization offers. All or a portion of this contribution may be excluded from income for federal income tax purposes.

 Model Notices

It is recommended that Employers still provide existing and new employees  with the model notices even though there seems to be no penalty at this time:

  • Model Notice for employers who offer a health plan to some or all employees.
  • Model Notice for employers who do not offer a health plan.
Reference: www.dol.gov/ebsa/healthreform. DOL Says No Fine for Not Providing Exchange Notices,
Employers told they “should” comply with Oct. 1 requirement, despite no penalty, 9/13/2013, By Stephen Miller, CEBS