Auto-enrollment provisions direct new members into benefit pool

WASHINGTON - A policy requirement that employers with more than 200 full-time employees must enroll their employees in a company health plan may not take effect until 2015.

The Department of Labor (DOL) announced that its guidelines governing automatic enrollment will not be ready in time. Employers will not be required to comply with the provision, which was designed to increase the insurance pool, until after the rules are issued. And the clock is ticking.

The delay in the automatic-enrollment feature provides "welcome relief" to employers balancing other concerns and regulations of reform, according to New York City-based Buck Consultants. Health insurers would likely find the auto-enrollment an advantage as the market grows.

"An opt-in provision is actually pretty cheap," she says. "It's much easier to assume everyone's in. There are fewer administrative costs."

Employers now consider that employees who fail to opt in to coverage have waived the company benefit. However, once the new regulations take effect, the reverse will be true. The law allows employers to wait up to 90 days before enrolling new employees, who must be given adequate notice and an opportunity to opt out of the plan. What level of coverage employers must provide is expected to be part of the DOL guidance.

Full-time employees work an average of 30 hours or more per week. Employers who don't comply will face a penalty. Employers will have to look at their individual circumstances to determine whether the penalty is more or less than providing health insurance coverage itself, Udow-Phillips says.

"It's a wage issue," she says. "Employers have to do the calculations themselves, but it's complex and there are many different situations."