I have a quick question for the business owners in the audience – How’s it going? Been busy? Terrific. I hate to bother you, but the U.S. Government has another job for you. You are going to help steer Americans to the new Health Insurance Exchanges. And by the way, the gig starts today.
The legislators and staff who gave us The Patient Protection and Affordable Care Act (PPACA) may not have known anything about health insurance, but they were experts in the federal bureaucracy. The PPACA’s home address may be the Department of Health and Human Services (HHS), but the Internal Revenue Service, the Department of Labor and other federal agencies are involved with the implementation. The law has metastasized and can now be found throughout the government, which makes the raw meat mantra of defunding “Obamacare” that much more cynical.
So Mr. or Ms. Business Owner, how are YOU involved? This next section is from the Department of Labor’s website. It is safer to print this exactly as it appears rather than to paraphrase the governmentese and miss something.Background On The Notice to Inform Employees of Coverage Options Under the FLSA
Section 18B of the FLSA, as added by section 1512 of the Affordable Care Act, generally provides that, in accordance with regulations promulgated by the Secretary of Labor, an applicable employer must provide each employee at the time of hiring (or with respect to current employees, not later than March 1, 2013), a written notice:
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) if the employee purchases a qualified health plan through the Marketplace; and
3. If the employee purchases a qualified health plan through the Marketplace, the employee may lose the employer contribution (if any) to any health benefits plan offered by the employer and that all or a portion of such contribution may be excludable from income for Federal income tax purposes.
On January 24, 2013, the Department of Labor (the Department) issued guidance stating the Department’s conclusion that the notice requirement under FLSA section 18B will not take effect on March 1, 2013 for several reasons.(2) The Department explained that this notice should be coordinated with HHS's educational efforts and Internal Revenue Service (IRS) guidance on minimum value. The guidance also stated the Department’s commitment to a smooth implementation process including providing employers with sufficient time to comply and select an applicability date that ensures that employees receive the information at a meaningful time. The guidance further stated that the Department expects the timing for distribution of notices will be the late summer or fall of 2013, which will coordinate with the open enrollment period for the Marketplace.
The Department is issuing this temporary guidance and model notice in advance of the expected timeframe announced in the guidance because, since the issuance of the guidance, the Department has received several requests from employers for a model notice on an earlier timeframe so that they may be able to inform their employees now about the upcoming coverage options through the Marketplace. Therefore, employers are permitted to use the model notice and/or rely on this temporary guidance prior to the applicability date stated below(3) to inform their employees earlier.
OK. How about in English?
Employers must provide a notice to each employee about the new Exchanges. There is no clear exemption for small businesses. Some parts of the health care laws apply to businesses with over 50 employees. There are rules for businesses with 20 employees. This regulation applies to businesses with as few as ONE employee.
The Department of Labor has, thankfully, created a pair of model documents. This link takes you to the form to use if you provide health insurance for any of your employees. This link is to the form for those employers who don’t.
Both forms advise the employee that he/she may save money by purchasing health insurance on the Exchange. Both direct the employee to the government’s healthcare.gov website (the home of the internet’s largest collection of pictures of happy people). Both forms ask who at this business may be contacted to confirm information should the employee choose to apply for coverage on the Exchange. And if the employer provides coverage, there is a third page that asks the business to voluntarily provide additional information. Don’t volunteer.
What are the penalties for failing to comply? I have no idea. I gave up looking for that. I am preparing the forms for my clients. Some businesses are sending out blank forms. That would not appear to comply with the law.
How does a small business that doesn’t offer health insurance, and thus doesn’t have an agent, know to provide this form to its employees? You’re reading it. Click on the link and access the form. And how many of your people will sign up for coverage through the new Exchanges? We’ll set sales goals next week.