Affordable Care Act
Affordable Care Act (ACA)
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The Patient Protection and Affordable Care Act (PPACA), commonly called Obamacare or the Affordable Care Act (ACA), is a United States federal statute signed into law by President Barack Obama on March 23, 2010. The ACA aims to increase the quality and affordability of health insurance, lower the uninsured rate by expanding public and private insurance coverage, and reduce the costs of health care for individuals and the government. It provides a number of mechanisms—including mandates, subsidies, and insurance marketplaces/exchanges—to increase coverage and affordability. The law also requires insurance companies to cover all applicants within new minimum standards and offer the same rates regardless of pre-existing conditions or sex. Additional reforms aim to reduce costs and improve healthcare outcomes by encouraging quality over quantity through increased competition, regulation, and incentives to streamline the delivery of health care. Although certain requirements have been delayed and others continue to be on track, Media Services provides our clients with certain basic information on the ACA through various materials such as this informational webpage; the Summary of Potential Employer Penalties Cheat Sheet prepared by the Congressional Research Service; Frequently Asked Questions (FAQs) relating to the entertainment industry; the Advisory Letter mailed on August 5, 2013 to all our active clients; The Internal Revenue Services’ official document and the Final Regulations issued by the Department of the Treasury on February 2014.
Employee Exchange Coverage Notice
The ACA requires all employers covered by the federal Fair Labor Standards Act (FLSA) to notify all employees (full-time, part-time, seasonal, variable hour, etc.) of the availability of health coverage on the marketplaces (i.e. exchanges), regardless of whether employers provide Minimum Essential Coverage (“MEC”), do not provide MEC, or never intend to provide MEC. COBRA notices must also be updated to reflect the availability of coverage through the health care marketplaces. The U.S. Department of Labor (“DOL”) issued Technical Release 2013-02, which provides temporary guidance for employers regarding these notice requirements. Model documents that employers may use to comply with their notice obligations are also available on the DOL’s website. Via these exchange coverage notices, employers must advise employees about:
- the existence of the marketplace, and include a description of the services provided by the marketplace and the manner in which the employee may contact the marketplace to request assistance;
- whether the employer’s health plan’s share of the total allowed costs of benefits provided under the plan is less than 60% of such costs (in which case the employee may be eligible for a premium tax credit if he/she purchases coverage through the marketplace); and
- if employees purchase coverage through the marketplace, they may lose any employer contribution to the employer’s health plan and that all or a portion of such contributions may be excludable from income for federal income tax purposes.
The DOL’s two published model notices on its website include a notice for employers who offer health coverage, and another for employers who do not:
- Employers that offer health coverage to some or all employees may utilize the model notice offered on the DOL’s website, available as a PDF here.
- Employers that do not offer health coverage to any employees may utilize the model notice offered on the DOL’s website, available as a PDF here.
Employers may also use a modified version of these model notices provided the necessary information is included in the notices. Employers are not required to give a separate notice to dependents (or other non-employee individuals who are or may become eligible for coverage under the plan).The notice must be provided on the date of hire. This is a one-time notice requirement; it need not be provided on an annual basis. The notice may be provided by first-class mail; or electronically, if the requirements of the DOL’s electronic safe harbor are satisfied (i.e., if the employees have access to a worksite Internet as an integral part of their work duties or if the employees have provided affirmative consent to receiving disclosures electronically).