Plan sponsors with more than 200 full-time employees must automatically enroll newly eligible full-time employees in the employer’s health plan subject to any permissible waiting period. The way this will work is that the employer will provide a newly eligible employee with notice of the opportunity to enroll, details about how and when to enroll, and what will happen if the employee does not make an election. During the enrollment period, an employee may make an election or choose to opt out of coverage. However, if the employee fails to make any election, the employer must default the employee into major medical plan coverage. Plan sponsors have a lot of open questions about this requirement. Additional details and the effective date are expected to be established by regulations, which the DOL does not expect to publish before 2014.
Automatic Enrollment Hot Topics & FAQs
- If we need to automatically enroll one of our full-time employees in coverage, do we provide employee only coverage or family coverage? What if we offer multiple health coverage choices?
Answer: Those are good questions. ACA does not provide the answers, but hopefully federal agency guidance will.
- Does an employer have to comply with these rules if a collectively-bargained agreement already includes automatic enrollment provisions?
Answer: Probably, but ACA does not directly address this question. Hopefully Federal Agency guidance will clarify how the new requirements coordinate with existing collective bargaining agreements.
American Fidelity Assurance Company does not provide tax or legal advice.