October 1st is not just the date Vermont’s health exchange, called Vermont Health Connect (VHC), opens for business. It is also the deadline for employers to provide their employees with information about VHC. Although the notice is important to focus employers and employees on the logistics of buying health insurance on VHC and understanding coverage options, there is no $100-per-day penalty for failing to provide this notice. (See the section below for an explanation.)
The requirement affects all employers who are subject to the Fair Labor Standards Act (FLSA), which is essentially all employers, except the self-employed, or businesses that earn less than $500,000 per year. Most employers already know if they are subject to the FLSA, but if there are questions, the VHC website, listed below, has a link that helps employers determine whether or not they are covered.
The October 1st notice explains basic information about the employer’s current coverage (or lack of coverage). Its purpose is to help employees understand:
• Any health insurance their employer offers,
• What VHC is and how to get help in evaluating coverage options,
• The potential for tax credits to help employees pay for insurance, and
• The implications if employees choose to buy health insurance individually through Vermont Health Connect if their employer offers insurance.
A template for the notice to employees and an explanation of the details is up on the Vermont Health Connect website here: http://healthconnect.vermont.gov/notices. The federal model notice is also available on The Department of Labor’s site.
No $100-per-day penalty for noncompliance
Regarding the alleged fine, the U.S. Department of Labor website has posted the following “FAQ on Notice of Coverage Options:”
Q: Can an employer be fined for failing to provide employees with notice about the Affordable Care Act’s new Health Insurance Marketplace?
A: No. If your company is covered by the Fair Labor Standards Act, it should provide a written notice to its employees about the Health Insurance Marketplace by October 1, 2013, but there is no fine or penalty under the law for failing to provide the notice.
The information provided in this blog is generic and based on the general definitions and provisions of the Affordable Care Act and Vermont law. This blog post and the information it contains should not be interpreted as legal advice for any specific situation. Individuals with specific questions about their business are encouraged to consult an attorney.
photo by Adrian Clark