Most farms and small businesses are aware of the Affordable Care Act and some of its requirements. By Jan. 1, 2014, all individuals are required to carry health care insurance for themselves and their dependents. In just a few weeks, health care insurance exchanges (also known as the Health Insurance Marketplaces) come online to allow individuals and small businesses to shop for health care insurance. By January 2015 all employers with 50 or more full-time equivalent (FTE’s) employees are required to provide their full-time employees with health care insurance or face penalties.

Although employers received a one year reprieve from providing health care insurance to their full-time employees until 2015, many are unaware that all employers that are subject to the Fair Labor Standards Act (FLSA) must provide their employees with a health care benefits notification. By Oct. 1, 2013, any employer that meets the following criteria are held to meeting the employee notification protocol of the ACA.

This provision provides that “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 volume of business applies” (U.S. Dept. of Labor). Healthcare, education, and government agencies may have other or additional requirements. The United States Department of Labor provided a technical release that discusses employer notification requirements including:

  1. Providing the employee with information about the Marketplace shop (also known as the Exchange), how to contact the Marketplace, the type of services and how to receive assistance.
  2. Whether the employer provides insurance and if so, will it meet the minimum requirements of the ACA or if the employee will be eligible for a premium tax credit.
  3. That an employee who purchases a qualified health plan through the Marketplace, might lose the employer contribution (if any) to any health benefits plan offered by the employer and that all or a portion of such contribution may be excludable from income for Federal income tax purposes.

The U. S. Department of Labor has provided two sample notification templates that can be used by employers, one for employers that do not provide health care benefits to their employees and a template for employers that do provide health care benefits to their employees.  

With the complexity of this act, Michigan State University Extension reminds employers that it is always a good idea for all businesses to consult with their respective legal advisors to make sure they are meeting the necessary requirements of the Affordable Health Care Act.

For Further information please contact me at akantrov@msu.edu or view the MSU Extension Farm Information Resource Management webpage.