Affordable Care Act Disclosure Deadline

Oct. 1 is an important date in the implementation of the Affordable Care Act (“ACA”). Not only is this the date that insurance exchanges (“Marketplaces”) open, it is also the date of another requirement that affects a large percentage of all employers.

By Oct. 1, every employer with at least one employee and at least $500,000 in business volume must provide to all full- and part-time employees notice of coverage options available through the Marketplaces. Although some deadlines included in the ACA have been pushed back, this requirement remains. Covered employers must provide each employee with a form containing certain mandated information intended to assist the employee if he or she applies for coverage through the Marketplaces.

The Department of Labor has developed model forms, one for employers that offer a plan for employees, and one for employers that do not. Links to these forms appear below. The required notices must be provided to each current employee before Oct. 1, and thereafter to each new employee at the time of hiring. Although the law states that these notices are required, there is no fine or penalty under the law for failing to provide the notice. 

For REALTOR® associations, “business volume” would include dues payments, income from sale of items to members, and, in the case of Association-operated MLSs, subscription fees and dues for that service. The association’s combined revenue should be considered when calculating whether the association meets the required disclosure threshold.

Brokers whose sales associates are statutory independent contractors under IRS Code Section 3508 should note that the notice requirement described above is a part of the labor laws, and the classification of sales associates as independent contractors for federal tax purposes does not control in this context. The Department of Labor uses the “economic reality” test to determine whether an individual is an employee or an independent contractor.

Brokers seeking to assure compliance with the notice requirement could indicate that the notice is provided to the sales associate without prejudice to the broker’s classification of the sales associate as an independent contractor for any other purpose, including other provisions of the Affordable Care Act.