Automatic Enrollment for Health Plans in 2014? Not Just Yet….

Contributed by Rebecca Dobbs

The Patient Protection and Affordable Care Act (ACA) requires all large employers (with more than 200 employees) to automatically enroll full-time employees in a health plan, if they offer one.  This provision was scheduled to take effect in 2014. Interestingly, it was done as an amendment to the Fair Labor Standards Act (FLSA)–a law that allows plaintiffs, i.e. employees, greater remedies than the Employment Retirement Income Security Act (ERISA) currently does.

The automatic enrollment provision of the ACA will most likely cause employers to feel an immediate cost impact.  Increasing enrollment in a sponsored health plan will instantaneously increase the monthly invoice an employer receives from its insurance carrier.

Pursuant to the automatic enrollment provisions, employers are required to notify employees that they will be automatically enrolled in a health plan and give them an opportunity to opt out—not much else is known outside of that. 

On February 9, 2012, the Department of Labor (DOL) issued a Technical Release which, among a few other things, announced that guidance on automatic enrollment will not be ready by 2014.  The DOL made clear that until such final regulations are published, employers will not be required to comply.

The DOL has indicated that this delay is necessary “[i]n view of the need for coordinated guidance and a smooth implementation process….”  While this applies to just about every provision of Health Care Reform, we’ll take any additional time to seek any clarity that we can get.