An employer covered by the Fair Labor Standards Act must provide each of its employees (part-time and full-time) with a notice informing the employees of their right to enroll in health insurance coverage through a state insurance marketplace (exchange).
Employers who have at least 1 employee engaged in commerce and who have gross annual sales of $500,000 or more are covered by the Fair Labor Standards Act. So many employers are subject to this requirement.
The written notice must:
- Inform the employee of the existence of a state insurance marketplace;
- Include a description of the services provided by the marketplace;
- Explain how the employee may contact the marketplace to request assistance
- State that if the employer plan’s share of the total allowed costs of benefits provided under the plan is less than 60% of the total allowed costs or the employee’s premiums for self-only coverage exceed 9.5% of the employee’s household income, the employee may be eligible for a premium assistance credit and a cost-sharing-reduction subsidy if the employee purchases a qualified health plan in the individual market through the exchange
- State that if the employee purchases a qualified health plan in the individual market through the exchange, the employee may lose any employer contribution to any health benefits plan offered by the employer and that all or a portion of the contribution may be excludable from income for U.S. tax purposes.
The Department of Labor has two model forms employers can use to give to their employees. If you already provide health coverage for your employees, use this model form. If you do not provide health coverage for your employees, use this model form.
Employers must distribute the notice to all employees regardless of whether the employee is part-time or full-time or if the employer does or does not provide health insurance coverage to the employee.
For all employees who are employed before October 1, 2013, the notice must be provided by October 1, 2013. For employees hired on or after October 1, 2013, the notice must be provided at the time of hiring; however, through 2014, a notice provided within 14 days of an employee’s start date will be considered provided at the time of hiring.
The notice must be provided by first class mail or electronically under certain circumstances.
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Buzzkill Disclaimer: This post contains general tax information that may or may not apply in your specific tax situation. Please consult a tax professional before relying on any information contained in this post.