Questions Arise About Automatic Enrollment
The Patient Protection and Affordable Care Act requires employers with 200 or more full-time employees to automatically enroll all new full-time employees in the firm’s group health care plan. Current employees will be automatically re-enrolled. Employees will be allowed to opt out, similar to how many employers enroll employees in a 401(k) plan.
Important questions have emerged. First, it is unclear when this requirement becomes effective, since the specific statutory section is silent on when auto enrollment becomes effective. The Society for Human Resouce Management website suggests the intent of the missing effective date is to make auto-enrollment effective on January 1, 2014, when other provisions, such as the employer “shared responsibility” penalty become effective. However, the legal publisher CCH believes that the correct view is that when a section has no effectice date, it is effectively immediately. In any event, the section requires regulations to implement, so time will tell.
More troubling is the fact that the auto-enrollment section does not define “full-time” employee. In another section, “full-time” is defined as any employee who works on average at least 30 hours per week. Again, this definition refers to whether an employer with 50 or more full-time employees will be assessed a shared responsibility penalty. But read casually, this definition means that any employee who works on average at least 30 hours per week must be auto-enrolled in the group health care plan, a dramatic consquence for the many employers that require at least 35 hours for full-time status and therefore eligibility for health care benefits.
John Sarno, EANJ’s president believes that the statute should be read as requiring the auto-enrolling of employees who work at least 30 hours per week if they are otherwise eligible for health care benefits under the employer’s policy. However, Frank Palmieri, EANJ’s legal advisor, tentatively thinks that the law requires plans (insured and self-insured) to offer health care benefits to all employees who work at least 30 hours per week, regardless of the employer’s policy. However, he says that his views require constant update.
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