Babst Calland Employment Bulletin Feb. 2013: Exchange Notice Requirement Under the Fair Labor Standards Act: How Does an Employer Comply in the Absence of a State-Established Health Benefit Exchange?

Babst Calland Employment Bulletin Feb. 2013: Exchange Notice Requirement Under the Fair Labor Standards Act: How Does an Employer Comply in the Absence of a State-Established Health Benefit Exchange?

A little known provision of the Patient Protection and Affordable Care Act (the Affordable Care Act) amended the Fair Labor Standards Act (the FLSA) to require that employers provide all new hires and current employees with written notice of a health benefit exchange (Exchange) established in their particular state. The Notice Requirement is set forth in Section 18B of the FLSA, 29 U.S.C. § 218B. By its terms, the Notice Requirement applies to all employers that are subject to the FLSA.

Exchanges are new health insurance organizations that will be set up by state governments or the federal government to establish a competitive marketplace for individuals buying health insurance on their own and for small businesses. Pursuant to the provisions of the Affordable Care Act, states are expected to establish Exchanges, which will be run by a government agency or non-profit organization. However, if a state opts out of establishing a state-run Exchange, then the federal government will step in and create a federally-run Exchange for that particular state. Pennsylvania has announced that it will opt out of establishing a state-run Exchange.

The manner in which the Affordable Care Act defines an "Exchange" includes only an agency or non-profit entity that is state-established and state-run. The Act does not define an Exchange to include federally-established Exchanges. This definition raises the question: How does an employer comply with the FLSA Notice Requirement when Pennsylvania will not have an Exchange? Since Pennsylvania has opted out of establishing an Exchange, it would seem that employers in Pennsylvania are not under

any obligation to provide notice under the FLSA.

Please click on the Attachment: link at the top of the post to view or download the entire article.

Copyright 2013 • Babst, Calland, Clements and Zomnir, P.C. • Two Gateway Center, Pittsburgh, PA 15222 • 412-394-5400 • Employment Bulletin is privately distributed by Babst, Calland, Clements and Zomnir, P.C., for the general information of its clients, friends and readers. It is not designed to be, nor should it be considered or used as, the sole source of analyzing and resolving legal problems. If you have, or think you may have, a legal problem or issue relating to any of the matters discussed in the Employment Bulletin, consult legal counsel.

For more information about LexisNexis products and solutions connect with us through our corporate site.