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DOL Clarifies Employee Notice Requirement

American Staffing Association (10/15/13) Ed Lenz

Beginning Oct. 1, the Affordable Care Act requires all employers subject to the Fair Labor Standards Act to notify employees “at the time of hire” of their health insurance options. Staffing firms can satisfy this requirement with respect to new temporary and contract employees by furnishing the notice, along with other employment-related information (such as the Form I-9), at the time an individual first applies for work.

In a recent meeting with ASA and other members of the Employers for Flexibility in Health Care (E-Flex) coalition, a top official of the U.S. Department of Labor clarified which information employers must provide to employees to comply with the notice requirement. According to the DOL representative, all of the essential information is contained in Part A of the model employer notice form published by DOL.

DOL has announced that there is no fine or penalty under the law for not providing the notice, but this does not mean that staffing firms should not comply. Sponsors of group health plans have certain fiduciary obligations to plan participants and beneficiaries—and employees potentially could be adversely affected by not getting the notice, which could trigger private lawsuits. Staffing firms are urged to consult with their own counsel regarding compliance with the notice requirement.