Employers covered by the Fair Labor Standards Act (FLSA)* are required to provide a notice to employees about the state’s health insurance exchanges.
*In general, the FLSA applies to employers that employ one or more employees who are engaged in, or produce goods for, interstate commerce. This broad definition will likely encompass most employers.
There is one model for employers who do not offer a health plan and another model for employers who offer a health plan to some or all employees. Employers may use one of these models, as applicable, or a modified version, provided the notice meets the content requirements described below.
The notice is required to be provided automatically, free of charge to each employee, regardless of plan-enrollment status or part-time or full-time status. Employers are not required to provide a separate notice to dependents or other individuals who are or may become eligible for coverage under the plan but who are not employees.
The notice must be provided in writing in a manner calculated to be understood by the average employee. It may be provided by first-class mail. Alternatively, it may be provided electronically if the requirements of the Department of Labor’s electronic disclosure safe harbor are met.
There is no requirement to obtain an employee’s signature; however, an employer may want to track delivery and receipt of the notice.
• 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, employees may be eligible for a premium tax credit under section 36B of the Internal Revenue Code if they purchase a qualified health plan through an exchange.
• If employees purchase a qualified health plan through an exchange, they may lose the employer contribution (if any) to any health benefits plan the employer offers. All or a portion of this contribution may be excluded from income for federal income tax purposes.
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