The health insurance exchanges officially opened on October 1, but businesses and HR departments didn't have to take any action regarding them. According to the Society for Human Resource Management, the Department of Labor recently announced that employers wouldn't be fined for failure to inform staff members about the new marketplaces, which workers can use to find affordable coverage instead of using their company's group health insurance plan. This comes on the heels of the delay of the Affordable Care Act's employer provision in July.
The DOL recently explained that any enterprise "covered by the Fair Labor Standards Act" should have distributed written notice of the exchanges to the workforce by October 1 despite there being no penalty in place. The federal agency also notes that the FLSA "affects most private and public employment" so it likely covers many businesses that would have been fined for not notifying employees by the original deadline.
The SHRM points out that FLSA Section 18B requires employers to distribute written notices of the exchanges, inform workers that they may be eligible for tax credits if the company-sponsored plan didn't cover 60 percent of health care costs and that anyone who buys insurance through the exchange may lose all employer contributions to health plans.
How severe the penalties could have been
The penalty for not notifying employees about those three factors had a penalty of $100 per day for the entire noncompliance period under the ACA. This amount may seem paltry, but over time could have hurt a business' operating capital.
What should you do?
Employers now have a certain level of autonomy that they didn't previously have regarding the exchanges. Previously, companies thought they had to give written notice to avoid penalties, but now it seems that they can decide whether they actually want to or not.
The SHRM notes that some legal professionals are unsure what businesses should do. On one hand, some experts point out that there aren't any fines in place so it's companies that don't provide notices might not face any consequences. However, there is still a slight chance that circumstances may change and punishments may be forthcoming.
As a result, it's likely best to go ahead and inform your employees about the exchanges. You won't be penalized for complying with the FLSA as it's written and the DOL even has produced model notices that you can use as your own.