Mandatory Employer Notice for Health Care – Upcoming Deadline

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While most small nonprofit organizations (less than 50 employees) are not required to offer health care coverage to employees under the Patient Protection and Affordable Health Care Act (“the Act”) all employers are required to comply with the Act’s notice requirements.  The deadline is October 1, 2013 – right around the corner! 

Nonprofit organizations may satisfy the Act’s notice requirements simply by distributing one of the two model notices on the United States Department of Labor’s website.  One version is for employers who do not offer any health care plan, and the second version is for employers who offer a health care plan to some or all employees.

Notices must be provided to all current employees, as well as to all later hired employees.  Failure to comply with the notice requirement could result in fines as much as $100 per employee, per day of noncompliance. 

The U.S. Department of Labor has issued a Technical Release, which further explains that the following information must be contained in the mandatory employee notices:

1) The fact that a Health Insurance Marketplace (“the Marketplace”) now exists;

2) A description of services provided by the Marketplace under the Act;

3) An employee’s eligibility for a premium tax credit under section 36B of the Code, if the employee purchases a qualified health plan through the marketplace;

4) The fact that an employee who purchases a qualified health plan through the marketplace may lose the employer contribution (if any) to any health benefits plan offered by the employer, which would be excludable from income for Federal income tax purposes; and

5) The manner in which the employee may contact the Marketplace to request assistance.

The notice must be written and such that it is understandable by the average employee.  It may be provided either by U.S. mail or electronically if the requirements regarding electronic disclosure under 29 C.F.R. 2520.104b-1(c) are met.