ACA Automatic Enrollment Requirement Repealed

On Nov. 2, 2015, President Obama signed into law the Bipartisan Budget Act of 2015, which includes a provision repealing the ACA’s automatic enrollment requirement.

Previously, under the ACA, certain large employers would have been required to automatically enroll new employees and re-enroll current employees in one of the employer’s health plans, subject to a permissible waiting period. This requirement would have applied to employers subject to the Fair Labor Standards Act (FLSA) with more than 200 full-time employees.

Some experts opposed the automatic enrollment requirement because they believed it would cause administrative issues for employers, such as having an employee enrolled in the employer’s coverage who is also covered by a spouse’s plan. The requirement was intended to take effect once final regulations were issued and an effective date was set.
Under the new law, though, employers will not be required to automatically enroll employees in coverage. In certain cases, however, employers can choose to create an automatic enrollment process if employees are provided enough notice and the opportunity to opt out of the plan. Employers should also be aware of any applicable wage withholding laws in their state, which may require an affirmative election for employees before any payroll deductions can be legally made.

For more information about setting up an automatic enrollment option, contact Emery Benefit Solutions @ sue@emerybenefitsolutions.com.

The information contained in this newsletter is not intended as legal or medical advice. Please consult a professional for more information.

 

© 2015 Zywave, Inc. All rights reserved.

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