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Reminder to Employers: October 1st Exchange Notice Deadline

on Friday, 27 September 2013 in Labor & Employment Law Update: Sarah M. Huyck, Editor

Under an amendment to the Fair Labor Standards Act (“FLSA”) by the Affordable Care Act, employers subject to the FLSA are required to provide their current employees with a Notice of Exchange by October 1, 2013, in order to make employees aware of their option to obtain health coverage through their state’s exchange beginning January 1, 2013. The Notice must also be provided to all new employees hired after October 1, 2013.

 

The DOL announced earlier this month in a set of Frequently Asked Questions that there will be no penalty or fine for applicable employers who fail to timely provide their employees with the Notice of Exchange. Prior to the DOL’s announcement, it was believed that the Affordable Care Act’s $100-per-day penalty for noncompliance would apply.

 

Due to the relative simplicity of the Notice and despite the DOL’s announcement that the penalty will not apply if an employer fails to provide the Notice, employers should nonetheless comply with the Notice requirement by providing Notices of Exchange to their employees by October 1. Compliance with the requirement would assist in mitigating any fiduciary liability or other potential liabilities that may accompany a failure to provide the Notice. Additionally, the DOL has indicated that the Notice requirement may be viewed as a required plan disclosure under ERISA and therefore could trigger an audit or other appropriate enforcement activity by the DOL if not provided.

 

To assist employers in complying with the Notice requirements, the DOL has provided a model Notice of Exchange which may be used by employers as a template: http://templatelab.com/FLSA-with-plans/.

 

Jeremy T. Christensen

1700 Farnam Street | Suite 1500 | Omaha, NE 68102 | 402.344.0500