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How Many Businesses Will Miss the Oct. 1 Obamacare Deadline?

By William Peacock, Esq. on September 12, 2013 | Last updated on March 21, 2019

Obamacare (or the Patient Protection and Affordable Care Act) mandates don't apply to me. My business is tiny! Besides, didn't that whole Obamacare thing get bumped back a year?

Perhaps, but whether or not the insurance mandate applies to the business you counsel, and regardless of the one-year delay in penalties for not providing insurance, know that nearly all small businesses are required to comply with the "Obamacare letters" provision of the law, and the deadline, October 1, is just weeks away.

Insurance Exchange Notification

According to the Department of Labor, small businesses are required to notify employees about the federal and state insurance exchange websites, where individuals and small businesses can shop for health plans, "no later than October 1." All small businesses covered by the Fair Labor Standards Act, meaning those with one or more employees and at least $500,000 in revenue, are required to comply with the "Obamacare letters" requirement.

Just to reiterate, this applies even if the employer-provided insurance mandate, for businesses with more than 50 full-time employees, doesn't.

Compliance is Easy

No, dear counselor, you won't have to draft anything by scratch. The U.S. Department of Labor has provided two model notices for small businesses to use, one for those who offer insurance, and one for those who do not. The notices, in short contain:

  • Information on the exchanges, and their services;
  • Contact information for help with the exchange websites;
  • The employee's potential eligibility for subsidized coverage on the exchange if your company's group health plan doesn't provide "minimum value"; and
  • The fact that the employee may lose any applicable employer contribution toward health insurance coverage if he or she chooses to purchase individual coverage through the exchange.

Complying with the notification mandate should be as simple as downloading those forms, filling in the blanks, and sending it to all full-time and part-time employees by October 1. Companies may also make their own forms, so long as they are substantially the same. Any employees that your company hires after October 1st must receive the notice within 14 days.

Penalties are Steep

Keith McMurdy, partner at FOX Rothschild LLP, warns FOX Business that because of the delay in the employer-provided insurance mandate, many small businesses are unaware of the separate notification letters requirement. Failure to comply with the requirement can result in a $100 per day fine under the PPACA, and possibly other penalties, under FLSA, may apply as well, since the requirement has also been incorporated into that statute.

Fortunately, you now know better. Better get started -- you have only nineteen days left!

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