ACA Automatic Enrollment Requirement Repealed

On Monday, November 2nd, President Obama signed the Bipartisan Budget Act of 2015 in which Congress repealed the requirement that large companies automatically enroll employees in employer health plans.

Since its enactment, there has been much concern among large employers regarding an auto-enrollment provision that the ACA added to the Fair Labor Standards Act (FLSA). Under that provision, employers with 200 or more full-time employees would have been required to automatically enroll new full-time employees in one of the employer's health benefits plans and to automatically continue coverage during open enrollment.  In addition, certain notices would have been required to give employees an opportunity to opt out of any coverage in which they were automatically enrolled.

The ACA's auto-enrollment provision had not yet been enforced, after the Department of Labor delayed implementation of this requirement indefinitely-pending further regulations. However, lawmakers and business groups pushed for its elimination because of the financial and administrative burdens it presented.

For many employers, the repeal of the auto-enrollment mandate is welcomed relief from yet another ACA compliance requirement.

Marshall & Sterling aims to keep our clients informed with valuable and timely information on issues that impact your benefit plans. As always, please do not hesitate to reach out with any questions.