DOL Employer Insurance Notification – $100 per day fine appears to be a myth!


How many people remember when the PPACA (Health Reform Law) was being debated in congress that the then speaker of the house said:

 “we have to pass the bill so that you can find out what is in it.”

Well, it appears that, long after the bill was passed and became law, we are still trying to figure out what is in it!

Today the Department of Labor (DOL) has announced that there will be no penalty of $100.00 per day for employers who fail to provide notification to its employees of health insurance options. The last week it was widely speculated, and accepted that employer’s who were not in compliance could be subject to that fine. The DOL’s website released the following information under a FAQ section on their website:

Q: Can an employer be fined for failing to provide employees with notice about the Affordable Care Act’s new Health Insurance Marketplace?

A: No. If your company is covered by the Fair Labor Standards Act, it should provide a written notice to its employees about the Health Insurance Marketplace by October 1, 2013, but there is no fine or penalty under the law for failing to provide the notice.

You can reach this FAQ by clicking HERE



A little known requirement of the PPACA (health care reform law) is that it places a duty on Employers (with 1 (or more) employee & $500,000 (or more) in annual gross revenue) to provide every employee notice of the Health Insurance Coverage Options including Notice of the employees opportunity to find insurance in the state/federal marketplace(formerly Exchange).  The Dept of Labor issues a Guidance in May prior to the postponement of the employer mandate – but it is apparent they are not postponing this notice duty. 

 So, what happens if you fail to provide this notice?

The rule’s stated penalty is a continuing fine of $100.00 per day!

The Guidance provides a sample Word form to use for the notice.  We recommend using this form because if it is fully completed, you will be assured compliance with the requirement.   The Notice must be mailed to the employee for receipt not later than 10/1/2013 or electronically sent  if the email complies with DOL’s safe harbor for electronic disclosure. 

(Suggestion: If you choose the email option you should probably be sure to use a “READ Receipt” function). 

Links to the sample form and the safe harbor are included in the DOL Technical Release 2013-02 which can be found at:



Also, this notice requirement includes an employer duty to provide any and all new hires the same notice at the time of hiring.



Paying Your Marketers Properly – Revisiting the Rabbit Hole

© 2012 Paul Hirsch

Update: 12-06-2012 – This Article Series is not forgotten, it is still “in-the-works!” In our desire to compile an authoritative basis for our opinion on this matter we are still reviewing a massive amount of documents, from Legislative History of Congress all the way to state court litigation documents which address this topic. We have read most of it and have “digested” what we have read. However the creation process is taking a backseat to ongoing litigation. We are simply waiting for things to slow down a bit before we delve into writing this article series – after all client needs come first!

Of course, if you have specific questions about a current situation or questions about what you want to do in terms of your marketing approaches, we are more than willing to advise you on a particular circumstance! If in doubt – ASK US!-

Paying Your Marketers Properly – Revisiting the Rabbit Hole

Introduction – Part 1 (of 5)

marketingAfter updating our website recently we have noticed that our article “Paying Your Marketers – Properly” and the issues covered within it have spurned many questions and comments both here on our site and from some of our clients. The health care industry is an ever-changing world, subject to ebb and flow of legislation, agency rules / regulations, court decisions and an ever-changing labor pool. Notably, Liz wrote this article almost ten years ago!

Many changes have occurred throughout the health care industry since the original article was written. Government agencies charged with oversight of the industry and its participants work differently then they did ten years ago. In fact, almost every facet of the industry has been affected by continual changes in the laws, rules, and regulations governing how agencies do business in this marketplace. It follows that the issue of paying marketers has changed also. Ultimately the crux of the original article remains in place, but none-the-less it deserves a fresh analysis.

One illustration of this change can be seen in the government’s focus (both on the state and federal levels) on strengthening and enforcing the prohibitions on fraud and abuse within the industry. The government’s new resolve in combating fraud and abuse has developed throughout many areas. One of the most visible examples of this new focus and resolve is the DOJ-HHS’s HEAT strike-teams, which actively combines and focuses the intelligence and resources of federal and state agencies towards the single inexorable goal of prosecuting businesses and people involved in Medicaid and Medicare fraud and abuse.

Moreover, beyond the health care industry itself, almost every industry (including health care) and every business, across the country, faces the perils and pitfalls of the changing environment of employer / employee relationships and employment laws. Federal and state agencies have promulgated new rules and regulations, and have adapted their methods and strategies in dealing with employment law. The “old-hat” areas of discrimination, retaliation, and harassment are as much of a concern as ever. However as technology advances and permeates the fabric of our society new questions are being raised such as: When can you run a criminal background check on a prospective employee? Can you ask a potential employee for their password to social media websites so you can better evaluate them? What are the limits you can place on employees’ use of social media both on the clock and off the clock (there is a surprising amount of controversy in this area particularly!)?

So how does all of this effect marketing strategies and payment structures for marketers in the health care industry?

In some ways many things are unchanged, but unfortunately that is not the whole story. Certain recent developments in the health care industry and employment law should give pause to health care providers when they decide to start or continue with marketing strategies and payment structures.

We have decided to start a multi-part series of articles which will shed new light on some old concepts, highlight certain techniques and approaches to structuring marketer training and payment, identify emerging issues and areas of concern, and suggest “functional adaptation methods” which can help health care businesses avoid potential pitfalls.

Please note: Many of the emerging issues about social media and employment law could be entire articles in and of themselves. So, this series will touch on some points of these emerging issues, but if there is interest in a more in-depth look we will consider putting together an article on these issues themselves.

Here are the planned segments:

Part 1: Introduction

Part 2: Health Care Laws (Anti-kickback and other federal rules & – Employee vs. Independent Contractor considerations)

Part 3: Employment Laws ( Fair Labor and Standards Act (FLSA) – wages paid and hours worked – payment structures – necessary documentation)

Part 4: Emerging Concerns

Part 5: “Functional Adaptation Methods” ®

(Please note regarding the phrase “functional adaptation methods:” some people might be looking for “best practices,” however we detest this catch phrase and purposefully choose to avoid it. As many successful business people can attest this phrase is one of the general corporate ear candy catch phrases which are in vogue. At the outset, this phrase in particular tends to over-simplify complex issues, because what might be best a best practice in one instance might not be what is best for every situation.)

Recordkeeping Requirements Under The Fair Labor Standards Act (29 C.F.R. PART 516)

© 2002 Lucian J. Bernard, Esq.


RecordkeepingThe Fair Labor Standards Act, (FLSA), is a federal statute which requires an employer to compensate its non_exempt employees at a stated minimum wage and overtime pay at a rate of not less than one and one half times the regular rate of pay for all hours worked in excess of forty in any one workweek. The FLSA is a remedial statute, which reflects Congressional intent to provide broad federal employment protection to workers. The Office of Inspector General (OIG) and the Department of Labor have both targeted health care employers for enforcement actions. The consequences of non_compliance can be financially devastating.

The FLSA contains many other legally enforceable obligations for employers as well. This is the first in a series of articles about the requirements of the FLSA and will concern the record keeping requirements incumbent upon all employers. Future articles will deal with subjects such as exemptions from overtime requirements, the fee basis of payment, damages for non_compliance, joint employment and the distinctions between an employee and an independent contractor, with particular emphasis on those requirements as they affect health care providers.


Under the FLSA, all covered employers are required to keep certain records on each non_exempt employee. There is no specified format for this data, but the employer is required to maintain the following information:

1. Employee’s full name and social security number
2. Address
3. Date of birth, if under 19
4. Sex and occupation
5. Time of day and day of week on which the employee’s work week begins
6. Hourly rate of pay
7. Hours worked each work day and total hours worked each work week
8. Total daily or weekly straight time earnings, exclusive of overtime
9. Total premium pay for overtime hours
10. Total additions to or deductions from wages paid each pay period
11. Total wages paid each pay period.
12. Date of payment and the pay period covered by each payment.

For exempt employees, the employer is required to keep all of the above, except for numbers 6_10, in such a manner that the employee’s entire remuneration, including fringe benefits and prerequisites, can be readily calculated. Under these provisions of the FLSA, each employer is required to display an official poster in the workplace which outlines the provisions of the Act. Note that an employer is required to keep a record of all hours worked by an exempt employee compensated by fee (#7).

An employer’s records under the FLSA must be kept in a place where they can be produced within 72 hours of a request by the Secretary of Labor, or the Administrator of the Wage and Hour Division. All of the required records are subject to inspection by the Administrator. If an employer, or group of employers, due to peculiar conditions under which they must operate, wish to modify one or more of these record keeping requirements, the employer(s) may submit a written petition to the Administrator of the Wage and Hour Division, requesting such a waiver.

Payroll records, collective bargaining agreements, plans, trusts, employment contracts and the employer’s sales and purchasing records must be kept for three years. Supplementary records, such as time cards, wage rate tables, orders, shipping and billing records must be preserved two years under the FLSA. An employee does not have the right to sue his or her employer for the employer’s failure to abide by the FLSA’s record keeping requirements. Only the Department of Labor can maintain such an action.

There are several exceptions to the record keeping requirements. Those of particular interest to health care providers include employees of hospitals and residential care facilities. Those institutions can invoke the so_called “8/80 Rule.” It does not apply to home health agencies. It is designed for employees of residential care facilities who are primarily engaged in the care of the sick, the aged, or mentally ill and whose patients reside on the premises. It permits the employer to establish a fourteen day work/reporting period, instead of the usual seven day work period required under the Act.

Consequently, the seven day record keeping requirements listed above are expanded to fourteen days in the case of residential care facilities who use the 8/80 rule. In addition, the FLSA requires that any institution using this exception to the record keeping requirements must have a written agreement which summarizes its terms and indicates how long it remains in effect.

Another exception to the general record keeping requirements is known as a “Belo contract.” A Belo contract, is designed for an employer whose employees work irregular hours and permits the employer to pay a fixed salary for a guaranteed number of hours, up to sixty, based upon an hourly rate. Employees are paid the guaranteed weekly wage regardless of the number of hours they actually work. Overtime would only be calculated during those work weeks when an employee worked in excess of sixty hours in a week. This exception requires that the wage must be set pursuant to a written employment contract.

The most common example would be a collective bargaining agreement between an employer and its unionized employees. Strict requirements that the employer keep accurate records of all hours worked are enforced because the employer must be able to demonstrate to the Department of Labor that there are fluctuations both above and below the guaranteed number of hours. Otherwise, the plan will be invalidated.

Information that is provided here is NOT LEGAL ADVICE !

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