A new part of the Affordable Care Act goes into effect next year that requires employers with 200 or more employees to enroll new full-timers in a company health care plan automatically unless they say otherwise.
The provision came from the success of automatic enrollment as applied to company 401k plans, in which employees were signed up automatically and had to choose not to participate. However, with most healthcare plans, once enrolled you’re committed until the next enrollment period, usually a year. The provision was added to help encourage people to sign up for employer-based plans and then only migrate to the state exchanges if the cost was unaffordable or the coverage was inadequate.
However, in some larger companies that have been doing this for years already, experts say a common practice includes giving the employee 30 days to change or decline enrollment. Companies do this because many times, employees who thought they would not be able to afford healthcare coverage see the actual cost and realize it’s not as expensive as they thought it would be, and having more people enrolled in the insurance plan keeps employer costs down.
Employers are not required to begin automatically enrolling new employees until regulations governing the provision are released from the Department of Labor. They are expected to come out in 2015.
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