Have You Provided the Obamacare Notice to Your Employees?

Like it or not, tomorrow is the day that the enrollment period begins for the health insurance exchanges created as a result of the Patient Protection and Affordable Care Act, commonly known as Obamacare.  Many of my readers were probably aware of that fact, but they may not be aware of the fact that it is also the deadline for all businesses subject to the Fair Labor Standards Act (“FLSA”) to provide their employees with notice of the existence of the health insurance exchanges and certain information about them and the health insurance plan, if any, provided by the business.   The failure of a business to provide this required notice could subject it to a $100 fine for each day after October 1 that the required notice is not given to its employees.

In general, any business, profit or nonprofit, with at least one employee that has gross annual revenue of $500,000 or more is subject to the FLSA.  However, certain types of businesses are subject to that Act regardless of the amount of their gross annual revenue. (Click here for an interactive tool to find out  who they are and to see if your agency is covered.)  Businesses who are covered by the FLSA must provide the required notice to all their employees, whether full-time or part-time and whether or not they are entitled to enroll in any health insurance plan sponsored by the business.  All covered businesses are also required to provide this notice to any new employees they may hire on or after October 1, 2013, within 14 days after the employee’s start date.

The required notice must be provided in writing by hand delivery or first class mail or it can be provided electronically if the U.S. Department of Labor’s standards for electronic delivery of notices are met.  The language of the notice must be such that it can “be understood by the average employee.”  To assist business owners who may not have the time to read the requirements and draft their own notices, the Department of Labor has created two model notices that business owners may use to satisfy their obligations under this provision of Obamacare.  One notice is for businesses who offer health insurance coverage to their employees and one is for businesses who do not offer such coverage. (Click here for the Department of Labor’s main webpage on Obamacare which contains links to many other resources regarding a business’s obligations under that law.)  If you have trouble understanding what information the model notices created by the Department of Labor require a business to include, do not fear, you are not alone.  Click here for an explanation of what information is required.

Regardless of your position on Obamacare, it would be a good idea to make sure your agency is complying with its provisions and to let your commercial lines customers know what their obligations are under that law.  Failing to do so could be expensive for both your agency and its commercial lines customers.

Insurance Certificates, Obamacare, NARAB III

I apologize for not posting anything last week, but I was on a seven-day cruise to and through Alaska’s Inside Passage.  The weather was beautiful, the scenery was breathtaking, and the shipboard amenities were great, so I had a hard time focusing on issues relevant to Georgia insurance agents.  Since returning to the office, I have been working hard to catch up and in reviewing the voluminous e-mails that accumulated during my absence, I came across some items that were related to a couple of recent and one not so recent posts on this blog that I thought may be of interest to my readers.

First, insurance certificates.  In my post a month ago, I described the problems with insurance certificates that callers to the IIAG Free Legal Service Program (1-800-IIAG911) were having and what could be done about it.  I also mentioned that agents in other states were having many of the same problems.  Sure enough, the national association of independent insurance agents has recently announced a webinar on the latest developments regarding insurance certificates. It will cover errors and omissions issues, legal issues, and the new ACORD forms, among other subjects. Click here for more information on the webinar and a link to additional resources provided by the IIABA for its members on this important topic.

As most of you are aware, even though the “play or pay” employer mandate found in the Patient Protection and Affordable Care Act, commonly known as Obamacare, has been delayed until January 1, 2015 (click here for my post on that subject), the other provisions of that law that were due to take effect on January 1, 2014 remain in place.  Most notably, they include the health insurance exchanges, where individuals can shop for and purchase health insurance coverage that begins on that date, which exchanges are supposed to begin operating on October 1, 2013.  According to a recent post on an Ohio insurance agent’s blog that I follow, the enrollment period for coverage through the exchanges will actually last until March 31, 2014.  After that date, no further enrollment through the exchanges will be possible until October 15, 2014.  Those agents whose individual customers may be eligible for the tax credits offered by the exchanges or whose employer customers are considering whether to drop their coverage and send their employees to the exchanges should make sure their customers are aware of these and other deadlines that are associated with the exchanges. (Click here to read the full post about those deadlines.)

Finally, while I was on vacation, the U.S. House of Representatives passed the National Association of Registered Agents and Brokers Reform Act of 2013 (“NARAB III”) by an overwhelming vote of 397-6.  One of my first blog posts last year concerned the introduction in the House of Representatives of the National Association of Registered Agents and Brokers Reform Act of 2012, known as NARAB II.  That bill was also passed overwhelming by the House of Representatives, but had to be reintroduced because the Senate failed to act on it before the end of the last Congressional session.  The commentators have high hopes for Senate action this year.  If passed by the Senate, NARAB III would create a uniform system for reciprocal licensing of non-resident insurance agents and brokers, which would make the sale of insurance across state lines much easier.  Click here to read more about the legislation and its prospects in the Senate.

Has Your Agency Been Subpoenaed Lately?

If I had to pick an issue that has generated the most use of the IIAG Free Legal Service that I operate (1-800-IIAG911), the question of what to do if an agency receives a subpoena requesting that documents be produced, or more commonly what is known as a third party request to produce, would rank in the top 2 or 3.  In both situations, the agency is not a party to the lawsuit in question.  Instead, it has documents that one side or the other of a lawsuit thinks are relevant to the issues in dispute.  Typically, the subpoena or third party request to produce asks for all the documents in the agency’s possession regarding a particular insurance policy or insured.

Agencies are understandably concerned about the consequences to them if they produce documents that contain confidential or sensitive information and in some cases, the agency may be concerned about liability exposure for its actions in connection with the insurance policy or insured in question.  Realizing the position that a non-party to a lawsuit is put in by the service of a subpoena or third party request to produce, the Georgia Civil Practice Act relieves a non-party of all liability for the production of documents in response to such a request, if the non-party does not receive notice of an objection filed by another party to the lawsuit before it produces the documents in question.  Although the other parties to the lawsuit are supposed to be notified of the issuance of a subpoena or third party request to produce so that they will have an opportunity to object to it, that does not always occur.

For this reason and customer relations, I normally advise the callers to the IIAG Free Legal Service Program to notify the subject of the subpoena or third party request to produce of its service and that the agency intends to provide all the documents requested unless it receives notice of an objection being filed by the subject on or before a date that is shortly before the date production of the documents is required.  This should be done in writing and any response of the subject should be documented, as well.

In the case of a subpoena, the Georgia Civil Practice Act requires any objection to be filed within 10 days after its service and in the case of a third party motion to produce, the objection must be filed within 30 days after its service.  A subpoena will specify the date on which the documents must be produced, which date may not be much more than 10 days after its service.  So quick action may be required by the agency to protect itself.  The need for quick action is not as great with a third party request to produce, as the deadline for responding to such a request is a standard 30 days after its service.

The agency itself can file an objection to either a subpoena or third party request to produce within the above time frames.  This may be advisable if the documents requested contain information that the agency does not want revealed for its own reasons or it may do so to protect a valued customer relationship.  Once an objection has been filed by either another party to the lawsuit or the agency itself, the agency is relieved of any obligation to produce the documents in question until a hearing on the objection has been held and the court determines whether and to what extent those documents must be produced for inspection.

In an unusual twist, I recently received a call from an agency asking for advice on what to do about a subpoena that it had received in connection with a case that was pending in another state.  The subpoena had been issued by a court in the other state.   Such a subpoena has no legal effect in Georgia and thus, there was no obligation on the part of the agency to respond in any way to it, unless and until the subpoena was presented to a Georgia court and the Georgia court authorized its issuance.