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No Penalties For Not Telling Workers About Healthcare Exchanges

Posted on Date: Nov 12, 2013


On October 1st, despite a government shutdown and the looming threat of the United States government defaulting on its debts, many provisions of the Affordable Care Act (popularly referred to as Obamacare) came into existence with the mandatory opening of state and federal healthcare exchanges.

Anyone who has taken a peek at the news in the weeks since the opening of the exchanges knows that there have been more than a few glitches. What many small employers might not know, however, is that they were supposed to inform their employees of specific features of the Affordable Care Act.

The Fair Labor Standards Act (FLSA) requires employers that are subject to FLSA to provide all employees with a written notice that:

  • Informs them that the government healthcare exchanges exist
  • Explains the services the healthcare exchanges provide
  • How an employee can contact the exchange for help signing up for a plan
  • Informs them that they, in certain circumstances, they may be eligible for a tax credit if they purchase a healthcare plan through the exchange
  • If an employee purchases a healthcare policy through the government exchange, they may lose their employer’s contribution.

According to the original FLSA, employers who did not send out this notice by October 1st could incur a $100-a-day penalty.

Before you start panicking, the Department of Labor announced on Sept. 11 that the penalty will not be enforced. While the government still strongly urges employers to send out this notice, no fine will be levied for those that ignore the policy.

This is a smart move on the part on the government, not because flaunting the law should be overlooked, but because media reports indicated that many small business owners were not aware of the requirement. The last thing the administration wants to do is start lobbing big fines at America’s small businesses.

Still, it is not a bad idea for employers to take some time to really understand the new healthcare law and to make sure their employees are aware of their options so they can make the best healthcare decision for themselves and their families.  Better healthcare options means healthier and more productive employees.

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