Employers now have one less Obamacare requirement to worry about.
The ACA amended the FLSA to require employers that employ 200 or more workers to automatically enroll new full-time employees in a company-sponsored health plan.
This auto-enrollment mandate came out in 2010 when the ACA was signed into law, but it was never going to take effect until the DOL issued specific rules for the requirement. Nearly six years later, those rules were never issued.
And now the auto-enrollment has been scrapped altogether. The Bipartisan Budget Act of 2015, which President Obama just signed into law, repealed the requirement.
This comes as welcome news to many employers still reeling from having to comply with the ACA’s reporting requirements for 2016 — not to mention countless other mandates implemented by the ACA since 2010.
Can you still auto-enroll?
Despite the repeal, employers are still allowed to use “default” or “negative” elections for enrolling employees into company-sponsored health plan coverage if they choose to do so.
Under these types of arrangements, an employee will be deemed to have elected coverage unless they specifically opt-out.
To implement one of these arrangements, employers must provide coverage-eligible workers with a notice explaining the cost of coverage, the coverage itself and employees’ opportunity to opt out
You’ll also what to check with your state-specific laws on this subject, as some states have strict rules about auto-enrolling employees into plans that would result in withholdings from their paychecks. Many of these rules are overridden by ERISA, but it’s worth looking into in order to avoid any federal/state law conflicts or headaches.