Waldron & Schneider, LLP : Attorneys at Law

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Affordable Care Act Notice Requirement

On March 23, 2010, President Obama signed the Affordable Care Act into law ("ACA”).  While many provisions of this new law do not go into effect until January 1, 2015, a key provision contained in the Fair Labor Standards Act ("FLSA”) goes into effect on October 1, 2013.  Failure to comply with these requirements can lead to a fine of $100.00 per day for each day of noncompliance.      

Although you may have heard through the news that the employer mandate has been postponed, that is only a small part of this onerous law.  In fact, the FLSA applies to all employers who earn more than $500,000.00 per year in gross revenues.  The ACA contains an amendment to the FLSA that requires all employers to notify their employees of the option for the employee to buy health insurance through the "Health Insurance Marketplace” (also known as the "Exchange”).  This written notification must be given to all current employees by October 1, 2013.  All employees hired after October 1, 2013, must be given this notice within 14 days of employment.  This provision in the law was not waived.

The Exchange is a state-by-state private health insurance market that is available as a health coverage option to individuals and employees of small businesses. Open enrollment begins October 1, 2013, with coverage to begin January 1, 2014.

For purposes of determining if this requirement applies to an employee, the FLSA holds that an employee is all full and part time employees who are issued a W2 for tax purposes as well as any employees who are leased to the employer.  The notice must be provided to all employees, regardless of whether the employee is enrolled in or eligible to participate in an employer’s health plan.

Notices may be distributed in the office or sent by first class mail.  We strongly recommend you retain a copy of the notice signed by the employee in each employee’s personnel file.  There is an electronic notice provision allowing for electronic distribution provided the employer include a subject line clearly delineating that the message contains a notice about the Exchange, the employer retains a read receipt, and the notice advised the employee of the option to obtain a paper copy of the notice. While an employer may post the notice electronically on the company website or community bulletin board, such posting does not eliminate the requirement to personally provide each employee with a copy of the notice.

The Notice must contain each employer's Employer Identification information.  If an employer offers a health insurance plan, the employer must also include the group health plan information and indicate whether the coverage provided meets the minimum value standard.  A health plan meets the standard if it is designed to pay at least 60% of the total cost of medical services for a standard population. 

As always, if you have any questions regarding the notice, please do not hesitate to contact us. 


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