Businesses Must Give Notice

 In Insurance

One of the Affordable Care Act’s new requirements went into place on October 1, 2013. (That assumes no extension was granted before press time.) This applies to virtually all employers: any company with at least one employee, if the business is subject to the Fair Labor Standards Act. Generally, companies with at least $500,000 in annual revenues must send notices to all employees, full time and part time, informing them about the new health insurance exchanges. Noncompliance would be subject to fines of up to $100 a day, according to some prior reports; however, the U.S. Department of Labor has said that businesses won’t be fined for failing to provide the notices. Nevertheless, business owners should act immediately, if they haven’t already done so. In addition to notices for current employees, you must send these letters to new employees within 14 days of hiring.

According to Bill Freedman, partner in the Cincinnati law firm Dinsmore & Shohl, the U.S. Department of Labor has published templates of acceptable notices. Your company can reproduce these samples, send them to employees, and comply with the notice requirement. “However,” Freedman says, “the templates go far beyond the requirements of the law. Businesses that adopt the templates may broaden their exposure in other  areas.” Therefore, employers might want to reduce their notices to meet the minimum requirements; our office can help you find an acceptable solution.

Proposed regulations
Two other information reporting requirements are included in the Affordable Care Act, requiring many employers and health insurance companies to provide reports to the IRS and statements to employees and covered individuals. The reports required will include information about the type and period of coverage and the cost of coverage for employees. This information reporting will facilitate enforcement of the requirement to have health insurance.

In September 2013, the IRS published proposed regulations on these required reports. Once the regulations are finalized, presumably by 2014, reporting will begin for 2015 (with the first reports and statements due in 2016). Throughout 2014, companies that will issue these reports should begin data collection and put a system in place to prepare for dissemination.