There are consequences if you fail to communicate with your employees
Westchester businesses have until next Tuesday to give their employees a heads-up on the new healthcare exchanges. Whether you offer healthcare plans or not, under the Fair Labor Standards Act, employers are required to issue a Notice of Exchange and COBRA notice (where appropriate) to all employees by Oct. 1 and to every new employee hired after that date within 14 days of hire.
Chris Jardin, The Maxon Companies, Amy Allen, WCA, James Schutzer, J.D. Moschitto & Associates and Jill Bergman, CohnReznick. Photo: Lynda Schenkman Curtis
The good news is that the Department of Labor won’t impose penalties on businesses for non-compliance, said Chris Jardin, president and director of marketing at The Maxon Companies. Along with James Schutzer, vice president of J.D. Moschitto & Associates and Jill Bergman, vice president of compliance in group health & welfare services at CohnReznick, the trio of healthcare experts provided essential information to an audience of 100 Westchester businesses at last week’s WCA Lunch and Learn.
However, there may still be consequences for failing to communicate with your employees. The DOL requested voluntary compliance but employees could take civil action if they don’t receive notices, Jardin noted. “Translation? All businesses should comply,” he said. You can find the Department of Labor model notification notices here.
The model notices have a box for employers to check which indicates to employees whether an employer-sponsored plan meets the minimum value standard under the ACA. Complicating the issue is the fact that health insurance carriers are not indicating which plans are in compliance—plus, the IRS calculator is confusing, Jardin said. He recommended small businesses (under 50 employees) should leave that box unchecked for now, and large groups should take the time to consult an insurance broker since all fines are on hold until 2015.
Simply issuing the information without explanation may cause employee confusion, and both Jardin and Bergman said employers should clarify and give guidance on both their benefit programs and employees’ personal responsibilities.
“It’s up to you to help employees make sense of the clutter, reduce the noise and assist them through this transition,” said Bergman. “Employees need to understand the individual mandate that goes into effect Jan. 1, what the penalties are for not complying, and what counts as minimum essential coverage.”
While so many details remain murky around healthcare reform, what’s clear to us is that the burden is on employers to explain healthcare changes.