Affordable Care Act Update on New Requirements for Employers
Approximately 7 million to 8 million more Americans have health insurance now compared to a year ago due to provisions of the Affordable Care Act (ACA). ACA employer requirements sometimes change, and employers must be prepared to comply with new ACA rules for employers.
“One thing small businesses need to remember is that there are provisions of the ACA they cannot ignore even if they are below the 50 FTE level,” says HR Consultant Mike Haberman of Omega HR Solutions. “Employer requirements under ACA apply to companies subject to the Fair Labor Standards Act (FLSA), even if the employer does not offer health insurance coverage as a benefit.”
If you work with a Professional Employer Organization (PEO) to take care of human resources or disbursement of employee benefits, you should ensure that the PEO is up to date regarding any ACA notices that apply to your business. As of May of this year, there are two new requirements for companies subject to the FLSA.
New Requirements for FLSA-Covered Businesses
First, any company that’s subject to the FLSA has to provide a notice of alternative coverage to employees, whether or not the company offers health insurance benefits to employees. “The appropriate notice has to be given to employees within 14 days of being hired regardless if the company is required to offer health insurance,” says Haberman. Models for these notices can be found here for companies that offer health insurance and here for companies that do not offer health insurance.”
“The second thing required of companies that offer insurance that is covered by COBRA is an amended COBRA notification that informs the eligible participant that alternative insurance coverage is available through the HealthCare.gov website that may be less expensive than paying for COBRA coverage,” says Haberman. “The press release on the new rules can be found here along with links to the model form.”
Notice of Alternative Coverage
The notice of alternative coverage is designed to give employees an overview of their options under ACA employer requirements. For companies that offer healthcare benefits, the notice explains that when an offer of health coverage is available from an employer, and when that offer meets certain standards, employees of that company are not eligible for tax credits through the Health Insurance Marketplace and will likely get better healthcare value by using their employer’s offered healthcare benefits.
For companies that do not offer healthcare coverage, the notice of alternative coverage spells out the basics of whether employees might be eligible for a tax credit that will cut the cost of their monthly health insurance premiums.
Amended COBRA Notification
Employers should use the updated COBRA notifications going forward, because the Department of Labor considers use of the new notices to be good faith compliance with notice content requirements under COBRA. Revised COBRA notices include language that notifies employees of alternative options for continuing healthcare coverage, including the option of coverage under the ACA, Medicaid, or other group health plans that might be available (such as a spouse’s health insurance plan).
“If a small business is using a third party administrator they must insure that the TPA is using the appropriate form,” says Haberman. Human resources organizations, PEO service providers, and individual employers must all remain up to date in knowledge of ACA employer requirements. Notice of alternative coverage, and new language concerning the ACA in notification about COBRA are new requirements that are now in effect. Whether you administer your employee benefits yourself or use a PEO company for these services, make certain these new notifications are used going forward so you can remain in compliance with ACA rules for employers.
How will changes in the ACA affect your business? Now is the time to take action and talk with a PEO in your area. Find out more by calling SourceOne Partners, a direct link between your small business success and qualified PEOs in New Jersey, Florida and throughout the country. Call us today at 561-674-0748 or contact us online.