On December 22, 2017, The Tax Cuts and Jobs Act was signed into law. The information in this article predates the tax reform legislation and may not apply to tax returns starting in the 2018 tax year. You may wish to speak to your tax advisor about the latest tax law. This publication is provided for your convenience and does not constitute legal advice. This publication is protected by copyright.
Certain employers must provide written notice to employees about health insurance coverage options available through the Marketplace (insurance exchanges).
- Notices must be provided by employers to whom the Fair Labor Standards Act applies. Generally, this means an employer that employs one or more employees who are engaged in, or produce goods for, interstate commerce. For most firms, this rule doesn’t apply if they have less than $500,000 in annual dollar volume of business.
- Employers must provide a notice to each employee, regardless of plan enrollment status (if applicable), or of part-time or full-time status. Employers do not have to provide a separate notice to dependents or other individuals who are, or may become, eligible for coverage under any available plan, but who are not employees.
- The notice must be provided in writing in a manner calculated to be understood by the average employee. The notice must (1) include information regarding the existence of a Marketplace, inform the employee that the employee may be eligible for a premium tax credit if the employee purchases a qualified health plan (QHP) through the Marketplace, and (2) include a statement informing the employee that if the employee purchases a QHP, the employee may lose the employer contribution (if any) 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. Model language notices are available on the Department of labor’s EBSA’s website. There is one model for employers who do not offer a health plan, and another model for employers who offer a health plan to some or all employees.
- Timing and delivery of notice. Employers must provide the notice to each new employee at the time of hiring. The Department of Labor considers a notice to be provided at the time of hiring if it is provided within 14 days of an employee’s start date. Employer Health Flex-Spending Plan Contributions Limited.