September 3, 2013



Under the Affordable Care Act, most employers are required to give written notice to their employees concerning insurance coverage options. The requirement applies to all employers who are subject to the Fair Labor Standards Act, i.e., employers engaged in, or produce goods for, interstate commerce, and with an annual business volume of $500,000. It specifically applies to hospitals; institutions primarily engaged in caring for the sick, elderly, mentally ill, or disabled who reside on the premises; schools for children who are mentally or physical disabled; preschools,  elementary and secondary schools and institutions of higher education; and federal, state and local government agencies.

The notice must be delivered by ordinary mail or by email (if the Dept. of Labor’s electronic disclosure safe harbor rules are followed) to all employees (both full-time and part-time) by October 1, 2013.

There are three points that the notice must cover: (1) it must inform the employee of the existence of the “Marketplace” (also known as the Exchange), describe the services provided by the Marketplace, and tell the employee how to contact the Marketplace for assistance; (2) it must tell the employee that the employer plan’s share of total allowed costs of benefits provided under the plan is less than 60 percent of such costs, he or she may be eligible for a premium tax credit if the employee buys coverage through the Marketplace; and (3) that if the employee buys health coverage through the Marketplace, he may lose the employer contribution to any health benefits plan offered by the employer and that all or a portion of such contribution may be excludable from income for Federal income tax purposes.

Below are links to model notices that the Department of Labor has approved for employers to use. Employers should, however, consider adapting the notices to suit their particular workforces, based on the healthcare coverage made available to employees.

Model notice for employers who offer health plans:

Model notice for employers who do not offer health plans: