Employers of All Sizes Must Notify Employees of Health Coverage Options

The Affordable Care Act ("ACA") amends the Fair Labor Standards Act ("FLSA") to require employers of all sizes to notify their employees of the option to purchase healthcare coverage through the public insurance marketplaces.  Employers must provide this notification by October 1, 2013.

The FLSA prescribes standards for the basic minimum wage and overtime pay for both public and private employment, requires that the notice:

• Explain how the employee may be eligible for a premium tax credit or a cost-sharing reduction if the employer’s plan does not meet certain requirements;

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• Inform employees that if they purchase a qualified health plan through the exchange, then they may lose any employer contribution toward the cost of employer-provided coverage, and that all or a portion of the employer contribution to employer-provided coverage may be excludable for federal income tax purposes;

• Include contact information for customer service resources within the exchange, and an explanation of appeal rights;

• Meet certain accessibility and readability requirements; and

• Be in writing.

The Department of Labor has provided two model notices on its website - one for employers who already offer an employee health plan (model notice #1), and one for employers who do not (model notice #2).

The norice requirement applies to all employers who are subject to FLSA.  In general, this law applies to employers that employ one or more employees who are engaged in, or produce goods for, interstate commerce.  For most firms, a test of not less than $500,000 in annual dollar volune of business applies.

The FLSA also specifically covers the following entities, regardless of dollar volume of business:

• Hospitals;
• Institutions primarily engaged in the care of the sick, aged, mentally ill, or disabled who reside on the premises;
• Schools for children who are mentally or physically disabled or gifted;
• Preschools, elementary and secondary schools, and institutions of higher education; and
• Federal, state and local government agencies.

For an explanation of the reach of the FLSA, please click HERE.

[Citations: U.S. Dept. of Labor; Mintz Levin, 8/20/2013.]

GINA Claims Rise Against Employers

In 2008, The Genetic Information Nondiscrimination Act (GINA) was enacted to include genetic information in the definition of personal health information.  GINA prohibits health insurers and employers from using an individual's genetic information to raise health insurance premiums or to make decisions on hiring and firing of employees. The Wall Street Journal reported that employee claims against employers for GINA violations have consistently risen since 2008, totaling 762 as of last November.

What Employees Should Know
Employees who believe their employer has violated GINA may file a charge of discrimination with the Equal Employment Opportunity Commission (EEOC).  The charge must be filed within 180 days. After the charge is filed, the EEOC will conduct an investigation.  If the EEOC finds a violation, they will pursue the case themselves through either mediation with the employer or by filing a lawsuit themselves. However if the EEOC finds no violation or cannot reach a settlement, they will issue the employee a "Right to Sue" letter, giving the employee permission to file a claim in court.

What Employers Should Know
Employers must be extremely careful about how they seek employee genetic information.  The ACA offers new incentives for employers to offer wellness programs to employees in order to improve health and drive down health insurance costs.  Sometimes it may be helpful for an employer to gather information on employee health information, including genetic information, in order to decide which wellness programs to implement.  However if an employer or its agent (someone working on behalf of the employer) asks about the health of an employee or a member of their family, that inquiry could violate GINA and subject the employer to fines by the EEOC if the employer uses that information to discriminate against the employee. Employers who wish to utilize company questionnaires to help shape their wellness programs should stress that employee participation is optional and ensure employees understand they are free to not answer questions. Employers can familiarize themselves with the charge handling process on the EEOC website.