The U.S. Department of Labor (DOL) recently conducted a public forum to address questions and concerns about how to implement changes made by PPACA to the Fair Labor Standards Act. PPACA requires that employers with more than 200 full-time employees automatically enroll new full-time employees in one of the employer’s health plans, provide notice of enrollment and allow employees to opt out of coverage. The automatic enrollment requirement will significantly impact the way many employers provide healthcare to their employees and will undoubtedly increase participation in employer-sponsored plans.
Forum panelists discussed a number of approaches to defining a “full-time employee,” agreeing that employer flexibility will be essential, while also recognizing a need to coordinate the definition of full-time employee with other PPACA provisions that rely on a 30-hour benchmark. Panelists considered a “look-back” approach (allowing employers to enroll employees not initially expected to qualify as full-time on the date of hire), a “reasonably-expects” standard (based on the number of hours an employee is expected to work at the time of hire) and a “maximum flexibility” standard (permitting employers to define full-time employee based on the unique circumstances of their workforce).
Panelists agreed that employees should be auto-enrolled in an employer’s lowest premium, self-coverage option. Further, an initial election to opt out should be continued or “rolled over” each year, unless an affirmative change is made, in order to prevent the need for employees to opt out each year. The automatic enrollment notice should be easy to understand and should detail the premium amount, the payroll deduction process, additional coverage options and the available opt-out procedures, among other items. Finally, the opt-out period should provide sufficient time for employees to determine their coverage needs, but not create unwieldy administrative burdens for employers due to refunds or ongoing enrollments and disenrollments.
Although no guidance has yet been released on the PPACA requirement, the forum’s questions and discussion offered employers an insight into the issues the DOL is considering and areas for which guidance may be forthcoming. Employers are not required to institute the auto-enrollment features until the implementing regulations are issued.