The impending need for compliance with the Patient Protection and Affordable Care Act of 2010 has been a source of great concern for employers. Recently, the U.S. government announced a one-year delay in the implementation of one of the statute’s central provisions, the employer mandate. Despite that extension, the law still requires that employers take action this year in order to remain compliant. This article examines one of the critical provisions of the law which remains in place notwithstanding the delay of the employer mandate.
On July 2, 2013, the U.S. Department of the Treasury announced that it was postponing the effective date of the employer mandate under the Patient Protection and Affordable Care Act of 2010 (“ACA”) from January 1, 2014 to January 1, 2015. The ACA requires annual information reporting by applicable employers (those with 50 or more full-time employees or equivalents) and imposes penalties on employers who fail to provide full-time employees with minimum essential coverage or if an employer’s plan is not affordable and fails to provide minimum value. When the Obama Administration announced last month that it would postpone the effective date of the employer mandate and its reporting and penalty provisions, businesses and nonprofits gave a sigh of relief.
But virtually all businesses and nonprofits (including small businesses) still have to provide a notice to employees advising them of the existence of a statewide health insurance marketplace. Beginning January 1, 2014, individuals and employees of small businesses will have access to health insurance coverage through a new state-by-state private health insurance market, now known as the Health Insurance Marketplace. Open enrollment via the Marketplace begins October 1 with new enrollees to be covered on January 1, 2014.
The ACA requires employers to send a notice to current employees by October 1 and to employees employed on or after October 1 within 14 days of hire. The Department of Labor has released model notices that can be used to satisfy this requirement. These model notices, one for employers who offer a health insurance plan and another for employers who do not, are available at the following web addresses: http://www.dol.gov/ebsa/pdf/FLSAwithplans.pdf (employers offering health plans) and http://www.dol.gov/ebsa/pdf/FLSAwithoutplans.pdf (employers not offering health plans).
Employers also should focus now on developing an optimal strategy for what health insurance benefits to offer in light of the ACA and related interpretive guidance, the health insurance marketplace, and the employer mandate.
Takeaway for employers: Even though employers can avoid the bulk of Obamacare requirements because they have been postponed a year, there is one important task that affected employers still must comply with this fall..