Automatic Enrollment
Large employers that are subject to the Fair Labor Standards Act (FLSA) will be required to automatically enroll new full-time employees in one of the employer’s health benefits plans (subject to any waiting period authorized by law), and to continue the enrollment of current employees in a health benefits plan offered through the employer.
For purposes of this rule, a large employer is one that has more than 200 full-time employees. Employees must be notified of the enrollment and given the opportunity to opt out of any coverage in which the employee was automatically enrolled.
Before this requirement can take effect, the Department of Labor (DOL) must issue implementing regulations.
The DOL has stated that, while it intends to complete this rulemaking by 2014, the automatic enrollment guidance will not be ready to take effect by 2014. According to the DOL, employers are not required to comply with automatic enrollment requirement until final regulations are issued and become applicable.
Action Items:
- Monitor health care reform developments for DOL regulations on the automatic enrollment requirement.
Once regulations are issued clarifying how employees should be counted, determine whether the employer is a large employer under this rule.
- If an employer qualifies as a large employer, implement processes to automatically enroll and re-enroll employees in the employer’s health plan in accordance with the regulations.
- Establish a process for notifying employees of their automatic enrollment and right to opt out of coverage in accordance with the regulations.
- Establish a process for disenrolling
