Elimination Of Health Plan Auto-Enrollment Requirement

The Bipartisan Budget Act of 2015, signed by President Obama on Monday, includes a provision that repeals the Affordable Care Act ("ACA") auto-enrollment requirement that would have otherwise applied to certain employer-sponsored group health plans in the future.  Specifically, the ACA would have required employers with more than 200 employees to eventually auto-enroll full-time employees into their group health plan coverage, as well as to automatically continue coverage for current employees each year.  As part of the auto-enrollment process, covered employers would have been required to give advance notice with an opportunity to opt-out of coverage and to sort through issues such as which coverage option to offer as "default" coverage, to the extent many larger employers offer multiple options.
The auto-enrollment requirement, which was intended to encourage increased enrollment in employer-sponsored health plans, was opposed by some business industry groups, and had been a low priority compared to many other ACA requirements implemented by governmental agencies over the past few years.  In particular, the Department of Labor ("DOL") previously indicated that it was coordinating with the Treasury Department on auto-enrollment issues, and that employers would not be required to comply with any related requirements until regulations were released by the DOL in the future.  Although the DOL indicated at one time that it expected to release auto-enrollment regulations by 2014, plan sponsors were still waiting for more information on how to prepare for auto-enrollment and proposed effective dates.  Although this means that many employers had not yet invested significant resources in preparing for auto-enrollment, we believe the repeal of this requirement will be a welcome relief for many plan sponsors grappling with other ACA requirements, such as compiling transitional reinsurance fee information for 2015 and preparing for required ACA reporting in early 2016.  

The information provided is for educational purposes only. This information is from sources we believe to be reliable, but we cannot guarantee or represent that it is accurate or complete. The opinions are those of the writer, and the opinions and information presented are subject to change without notice.

Back to News & Updates