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.
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