Small business owners, listen up: Don't forget that your so-called "Obamacare letters" must be mailed to employees by October 1.
While small businesses with fewer than 50 full-time employees are generally not required to offer employee health insurance coverage under the Affordable Care Act, the "Obamacare letter" requirement still applies to almost all companies.
If your business falls under the Fair Labor Standards Act, then you are required to notify your employees about the Affordable Care Act's health-care exchanges, Fox News reports.
What does this letter need to say? Here's a breakdown:
What Your Letter Should Say
The "Obamacare letter" notification requirement applies to all businesses regulated under the FLSA. Basically, this covers all companies with at least one employee and $500,000 in annual revenue. If that describes your business, then you need to send this letter.
The purpose behind this letter is to ensure that all employees, regardless of their benefits plan status, are aware of the new public health insurance exchanges. As described by American Express' Open Forum blog, the letter should include:
- Notification that the exchange exists;
- A description of the services provided by the exchange;
- Information on how to contact the exchange to request assistance;
- The employee's potential eligibility for subsidized coverage on the exchange if your company's group health plan doesn't provide "minimum value"; and
- The fact that the employee may lose the employer contribution (if any) toward health insurance coverage if he or she chooses to purchase individual coverage on the exchange.
Sounds a bit complicated, right? Not to worry. The U.S. Department of Labor has provided model notices that can be used by employers. There is one version for those who offer insurance, and another for those who do not.
After You've Written the Letter
What do you do once you've written your letter? According to the Department of Labor, letters are to be mailed "not later than October 1" to all full-time and part-time employees. Going forward, all new hires should also be given the letter within 14 days of their start date.
With that said, small business owners have a little less than a month to write this letter. Don't delay -- get started on this soon.
September 26, 2013 Editor's Note: This post was revised after the Small Business Administration clarified that there is no penalty for failing to send "Obamacare letters" to employees.
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- What Small Businesses Need to Do for Obamacare Before Oct. 1 (Bloomberg Businessweek)
- How Obamacare's Employer Mandate Affects Small Biz (FindLaw's Free Enterprise)
- 5 Things You Must Know About Employees Health Benefits (FindLaw's Free Enterprise)
- Should Businesses Drop Healthcare Under Obamacare? (FindLaw's Free Enterprise)