Affordable Care Act Required Notice

Posted on Wednesday, September 18, 2013

There is an important notice that you may be required to give to your employees by October 1, 2013

The Affordable Care Act (a.k.a. Obamacare) requires all employers who are covered by the Fair Labor Standards Act (FLSA) to provide notices to all employees notifying them of their choices regarding the new health insurance exchanges and subsidies that may be available for qualified individuals.  This notice must be furnished to all employees by October 1, regardless of whether they obtain health coverage through you.  The notice must also be given to all new employees after September 30, 2013 at the time of hiring.

FLSA

The FLSA is the federal law regulating the wages and hours of employees.  Specifically, the FLSA (1) requires employers to pay covered employees a minimum wage for each hour worked; (2) requires employers to pay covered employees one and one-half times their “regular rate” for each hour worked in excess of forty in a given workweek; (3) regulates the employment of child workers; and (4) requires employers to make, keep, and preserve records of employees and their wages, hours, and conditions of employment.  The FLSA provides for both enterprise coverage and individual coverage.  Generally, enterprise coverage applies if you have one or more employees and gross annual sales of $500,000 or more.  Enterprise coverage does not apply to nonprofit organizations except where the organization’s activities are performed in connection with (1) a hospital, nursing home or school that is covered by the FLSA; or (2) a commercial venture, such as a thrift store or gift shop, operated by the organization.  If your nonprofit organization does not engage in any commercial venture, than FLSA probably does not apply to your employees on an enterprise basis.  Individual coverage applies to employees engaged in interstate commerce, producing goods for interstate commerce, or handling, selling, or otherwise working on goods or materials that have been moved in or produced for such commerce by any person.  The required notice only applies to entities under enterprise coverage, not individual coverage.  For additional information on whether you qualify under this Act, please visit www.dol.gov/elaws/esa/flsa/scope/screen24.asp.

Required Notice

The Department of Labor has provided model notices that you can use.  There are two different notices, one for employers who currently provide health coverage, and one for those who do not.  They are available at www.dol.gov/ebsa.  If you currently provide health coverage, you must complete the second page with information about your plan, but not the third page.  You should also provide contact information where indicated on the first page.  If you do not currently provide health coverage, the notice you will use does not require you to add any additional information.

The notice can be mailed or delivered to employees in paper form, or it can be emailed.  If you email the notice, there are some rules to follow.  You must take appropriate and necessary measures to reasonably assure that the employee receives the notice, meaning that you should send it using the return-receipt or notice of undelivered e-mail feature of your email system.  You must make sure that the subject line lets the receiver know that the email contents are important, and you must tell the recipient that they will be provided a free paper copy of the notice upon request.  More information on email requirements can be found in Federal Regulation 29 CRF 2520.104(b)-1. 

Posted by: Carrie Minnich, CPA

Posted in Mission Minded Nonprofits

Disclaimer: The information contained in Dulin, Ward & DeWald’s blog is provided for general educational purposes only and should not be construed as financial or legal advice on any subject matter. Before taking any action based on this information, we strongly encourage you to consult competent legal, accounting or other professional advice about your specific situation. Questions on blog posts may be submitted to your DWD representative.

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