Notice of Coverage Options

Notice of Coverage Options

Notice of Coverage Options from Department of Labor contains no fine for non compliance

During the past few months, all of the agents in the Group Health Insurance industry have been told that employers who don’t provide a Notice of Coverage Options or Notice of Exchanges to each one of their employees beginning October 1, 2013 will be subject to Department of Labor penalties. However, the Department of Labor recently stated in an FAQ that all employers “should provide a written notice to its employees…but there is no fine or penalty under the law for failing to provide the notice.”

Department of Labor FAQ on Notice of Coverage Options

http://www.dol.gov/ebsa/faqs/faq-noticeofcoverageoptions.html

Notice of Coverage Options contains no Fine for non compliance

The language in the FAQ contradicts Section 18B of the Fair Labor Standards Act. The FLSA was amended because of the Affordable Care Act and requires the Notice of Exchange to be provided to all employees. The purpose of the notice is to ensure employees are aware of all of the possible health insurance options for which they are eligible under the Affordable Care Act. In particular the notice is meant to inform employees about the plans available in the Exchange (Coveredca in California).

Requirement for Notice is still the Law

With just a few weeks until the October 1 deadline, this new language by the Department of Labor is confusing to say the least. Despite the FAQ, I believe employers have an obligation to provide their employees with the information in the notice. As I wrote in my May 29 blog about the Model Election Notice Requirement , distribution of the notice is required to comply with the FLSA even if no fines or penalties will be assessed. That means providing the notice to all current employees beginning October 1 and all new hires within 14 days of their start date.

Notice of Coverage Options Available here

The Department of Labor has created two notices to help employers notify their employees about the Exchange. The first is designed for employers that offer health insurance to their employees. The second is for employers that don’t offer employee health coverage. These notices can be used in their original format or modified as necessary to suit the needs of individual businesses.

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About David Brown

David Brown is a California Benefits Broker, who specializes in providing small businesses with the savings that only large companies usually get.

If you feel David could help your California business with employee benefits, health insurance, and healthcare reform issues, you can contact him directly below:

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