It’s amazing that, four-and-a-half years after the health reform law was signed, there are still provisions that not only haven’t kicked in yet but aren’t even on most people’s radar. One example is the auto-enroll provision, which says that, starting next year, employers with 200+ full-time employees will have to sign their workers up for coverage on an opt-out basis. What this means is that any full-time worker who doesn’t say that he doesn’t want coverage during his first 90 days of employment will automatically be enrolled in the group health plan.
For brokers who focus on individual health insurance, this bill is bad because uninformed employees who don’t understand that they need to decline the group coverage if they’d prefer to purchase health insurance in the individual market may find themselves locked into the group plan. It’s unclear at this point how the auto-enroll feature will coordinate with a section 125 plan if the employer has one.
As a recent BenefitsPro.com article by Dan Cook explains, businesses are concerned that the burden will create additional confusion and the Retail Industry Leaders Association believes it will be an “administrative nightmare.”
There’s no telling if the bill will pass – right now, Congress can’t seem to agree on anything, so any legislation requiring both Republican and Democratic support certainly has an uphill battle. If it doesn’t pass, though, this requirement is one more thing that may cause employers to think twice before offering benefits – not only is it administratively difficult but also, because people will be automatically enrolled, the “play” option will cost more for employers who are busy doing “play or pay” calculations.