ERISA-EBSA Postpones Due Date For Employer Notice About Affordable Care Act Insurance Exchanges

January 28, 2013

In FAQs about Affordable Care Act Implementation Part XI, the Employee Benefits Security Administration (the "EBSA") announces that the March 1, 2013 due date for the employer notice pertaining to the Affordable Care Act insurance exchanges has been postponed.

The FAQs say that section 18B of the Fair Labor Standards Act (the "FLSA"), as added by section 1512 of the Affordable Care Act, generally provides that, in accordance with regulations promulgated by the Secretary of Labor, an applicable employer must provide each employee at the time of hiring (or with respect to current employees, not later than March 1, 2013), a written notice:

1. Informing the employee of the existence of the Insurance Exchanges including a description of the services provided by the Exchanges, and the manner in which the employee may contact Exchanges to request assistance;

2. If the employer's healthcare plan's share of the total allowed costs of benefits provided under the plan is less than 60 percent of such costs, that the employee may be eligible for a premium tax credit under section 36B of the Internal Revenue Code (the "Code") if the employee purchases a qualified health plan through an Exchange; and

3. If the employee purchases a qualified health plan through an Exchange, the employee may lose the employer contribution (if any) to any healthcare plan offered by the employer and that all or a portion of such contribution may be excludable from income for Federal income tax purposes.

The FAQs say further that section 18B of the FLSA provides that employer compliance with the notice requirements of that section must be carried out "[i]n accordance with regulations promulgated by the Secretary [of Labor]." Accordingly, it is the view of the Department of Labor that, until such regulations are issued and become applicable-and they have not been yet- employers are not required to comply with FLSA section 18B. The FAQ then discusses the reasons for this postponement of the notice requirement, including an expectation that employers will subsequently be required to provide the notices in late summer or fall of 2013.