October 1, 2013 – Deadline – Required Notice to Employees

Notice of Coverage Options –

The new Health Insurance Marketplace will begin enrolling participants on October 1, 2013 for coverage starting as early as January 1, 2014. Previously referred to as the “Exchange,” the Marketplace will provide health insurance options for individuals and employees of small employers (50 or fewer employees). Individuals and families with household income below specific levels will be eligible for financial assistance when they purchase coverage through the Marketplace, in California it is known as “Covered California”

New section 18B, added to the Fair Labor Standards Act (“FLSA”) by the Patient Protection and Affordability Care Act (“PPACA”), requires ALL employers to provide each employee, with a written notice of their options through the Marketplace. Employers must provide the notice to current employees not later than October 1, 2013 and, on or after October 1, 2013, at the time a new employee is hired.

The notice must inform employees:

• About the existence of the Marketplace, including a description of the services provided by the Marketplace, and the manner in which the employee may contact the Marketplace to request assistance;

• If the employer plan’s share of the total allowed costs of benefits provided under the plan is less than 60%, that the employee may be eligible for a premium tax credit if the employee purchases a qualified health plan through the Marketplace and;

• That the employee may lose any employer contribution and related tax savings towards the cost of employer-provided health benefits if the employee purchases a qualified health plan through the Marketplace.

The notice must also include specific information about the employer-sponsored health plan’s coverage, categories of employees and dependents eligible for coverage and whether the plan meets the affordability and minimum value standards described in section 36B of the Internal Revenue Code.

To assist you with content requirements, the Department of Labor (“DOL”) has provided two model notices, one for employers who offer a group health plan to employees and one for employers who do not offer a group health plan:

Model notice for employers who offer a health plan  (

Model notice for employers who DO NOT offer a health plan  (

Employers must provide the Notice of Coverage Options to each employee, regardless of plan enrollment status. Employers are not required to provide a separate notice to dependents. The notice can be provided by first-class mail or electronically if the DOL electronic safe-harbor requirements are satisfied (these are the same rules that apply to ERISA plan disclosures).

If you have any questions regarding this mandate, please contact your agent or Gaspar Insurance Services’s Life and Health Department at 818-302-3060 x131.