skip to main content

Affordable Care Act - Employer Notice Requirement

As part of the Affordable Care Act, employers must provide their employees with a notice of their new healthcare insurance coverage options by October 1, 2013.

Beginning on January 1, 2014, individuals and employees of small businesses will have access to health insurance coverage through a new private health insurance market - the Health Insurance Marketplace.  The Marketplace offers "one-stop shopping" to find and compare private health insurance options.  The Affordable Care Act created a new section in the Fair Labor Standards Act ("FLSA") requiring employers to notify their employees of these coverage options.

This written notification must:
(1) Inform employees about the Marketplace, including providing a description of its services and how an employee can contact the Marketplace for assistance.
(2) Inform employees that they may be eligible for a premium tax credit, under 36B of the Internal Revenue Code.  Employees are only eligible if the employer's plan's share of the total allowed costs of benefits provided under the plan is less than 60 percent of such costs.
(3) Inform employees that if they purchase a qualified health plan through the Marketplace, then they 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.

This notice must go to all employees, regardless of part-time or full-time status.  It must be in writing and in a manner so that it can be understood by the average employee.  It may also be provided by first-class mail or electronically.

The Department of Labor has provided sample forms that you can access for employers with health insurance plans and for employers without health insurance plans.

It is important to note that only employers subject to the FLSA are required to provide this notice to their employees.  

If you are not sure if you are subject to the FLSA or if you have more questions about this notice or the Affordable Care Act, contact a member of our Labor and Employment Department.