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New ACA Requirements Creeping Up in October

As Oct. 1 quickly approaches, you may be feeling haunted by health care reform and the upcoming exchange notification requirements facing ALL employers subject to the Fair Labor Standards Act. Even if you already offer adequate and affordable health coverage to your employees, you too are required to issue exchange notifications to educate your workforce on the new health care marketplace.

Companies that provide health benefits may be especially curious as to why this requirement is rattling their business. The answer is that although the employer mandates to provide health insurance have been delayed to 2015, the individual mandate requiring individuals to buy health insurance has not. To help these individuals find coverage that meets their needs and fits their budget, employers are to direct them to a health care exchange/marketplace set to open Oct. 1, 2013. To help individuals enroll in coverage for 2014, the marketplace is designed with one-stop shopping for comparing private health insurance options. It is estimated that next year 7 million uninsured Americans will receive federally subsidized health coverage through the marketplace.

Employers Must Carefully Craft Their Marketplace Messaging
The Affordable Care Act has made it your responsibility to provide your employees with a marketplace notification regardless of their plan enrollment status or part-time or full-time status. Current employees must be notified no later than Oct. 1, 2013, and new hires must be notified at the time of hiring or within 14 days of their start date. The notice is to be provided automatically and free of charge.

The Department of Labor (DOL) is providing model notices on its website to help employers with the exchange notification process ( There is a model notice for employers who offer health insurance and a different one for those who do not, as well as Spanish versions of both.

Employers may use one of these models or a modified version as long as the content requirements are met. Content requirements include:

  1. Informing the employee of the existence of the marketplace, a description of the services provided, and the manner in which the employee may contact the marketplace to request assistance;
  2. If the employer plan’s share of the total allowed costs of benefits provided is less than 60 percent of such costs, the employee may be eligible for a premium tax credit under section 36B of the Internal Revenue Code if the employee purchases a qualified health plan through the marketplace; and
  3. If the employee purchases a qualified health plan through the marketplace, he or she may lose the employer contribution (if any) to any benefit 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 notice must be provided in writing in a manner that can be understood by the average employee. It may be provided by first-class mail or electronically if it meets certain DOL standards.

Paycom Offers Tricks and Treats for Compliance
Paycom cautions employers implementing processes for notifying employees of health care exchanges not to forget the importance of the tracking and reporting tools needed to prove that all employees have been notified in compliance with the requirements.

There’s no need to be frightened! With its On-Boarding and Document Management functionality, Paycom helps employers automate their compliance processes. It’s an easy trick to upload exchange notifications for employees to electronically access and acknowledge receipt of the document.

The real treat is your ability to track and report on those who have and have not confirmed the receipt of their exchange notice. Once employees have electronically acknowledged receipt of the notification, it will be stored in their online documents where they can refer to it at any time through their Self-Service portal.

It’s no hocus-pocus — just single-application technology designed to simplify your human capital management. Contact Paycom today to see a demonstration.

The content of this blog is intended to keep interested parties informed of legal and industry developments for educational purposes only.  It is not intended as legal opinion or tax advice and should not be regarded as a substitute for legal or tax advice.