California Employer Update: Required Affordable Care Act Exchange Notice Due October 1, 2013

Although the federal government has delayed the employer mandate provision of the Patient Protection and Affordable Care Act (PPACA or “ACA”), October 1, 2013 is still the deadline for employers to provide a notice of health care coverage options to their employees.

The notice informs the employee of the new health insurance marketplace (which, in the State of California, is “Covered California”), a description of services, how to contact the marketplace (also called an “exchange”) and additional required information.

Employers covered by the Fair Labor Standards Act (FLSA) must distribute the required notice to all employees, regardless of plan enrollment status (if applicable) or whether the employees are full or part time. Simply put, by October 1, 2013, all employers covered by the Fair Labor Standards Act are required to provide current employees with the notice. The Department of Labor (DOL) offers an online tool to help companies determine if the FLSA applies to them.

Starting October 1, 2013, each new hire must receive the notice within 14 days of the employee’s start date. In 2014, providing the notice within that time fulfills the DOL’s compliance requirement.

The DOL has issued temporary guidance on what the agency will consider as compliance with the notice requirement. 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 DOL has created two model versions of the required notice: one for employers that do not offer a health plan and another for employers that offer a health plan for some or all employees.