Under the Affordable Care Act (“Obamacare”), a church may have to notify its employees about the state-run insurance exchanges that will debut sometime in 2014. This requirement applies to all employers who are subject to the Fair Labor Standards Act (“FLSA”). Specifically, the notice must inform employees as to:
- The existence of the exchange and a description of the services provided by the exchange;
- The employee’s potential eligibility for subsidized coverage on the exchange if the employer’s group health plan doesn’t provide “minimum value” (i.e., the plan’s share of the total allowed costs of benefits provided under the plan is less than 60 percent of such costs); and
- The fact that the employee may lose the employer contribution (if any) toward health insurance coverage if he or she chooses to purchase individual coverage on the exchange.
To assist employers, the DOL has issued two “model” notices. One is for employers that sponsor a group health insurance plan and the other is for those that don’t. See the model notices at the links below:
You may need help filling out these notices. We recommend that you contact your insurance agent or benefits coordinator to obtain this assistance as they should be informed of the benefits provided by your plan.
At this point, you may be asking yourself, “Is my church subject to FLSA”? This is a difficult question to answer without knowing the specifics of your situation. Churches are not automatically exempt from FLSA, and can easily be subjected to the law in a variety of ways. (Here is a DOL technical release that provides more detail on the requirements of the notice: http://www.dol.gov/ebsa/newsroom/tr13-02.html )
At this time there does not seem to be any financial penalty for failure to comply with this requirement, however, there is also no harm in sending out the notification, regardless of whether you are required to do so. It is our opinion that it is easier to comply than to split hairs over a potential exemption and then worry about any future ramifications of non-compliance.
Please note that this is not a one-time notice. Effective, October 1, 2013 all new hires must be given the notice within 14 days of their start date.
If you would like assistance determining if your church is exempt from FLSA, you may contact our in-house attorney (Jared O. Hodge, J.D., CPA) for consultation on the matter. Mr. Hodge can be reached at firstname.lastname@example.org.