Thursday, March 12, 2015

Want to Really Anger Employees? Automatically Enroll Them in Your Health Plan Whether They Like it or Not

PPACA mandates that employers with more than 200 full-time employees are required to enroll newly hired full-time employees in a plan unless the employee specifically opts out of that plan. Federal regulators, however, have said that provision won’t take effect until the DOL issues regulations on the matter.  

But a new story caught my eye.  It seems that some employers are relying on PPACA to just enroll employees and deduct their pay whether they sign up or not.  Thankfully, none of my clients have chosen to go this route.  But, with PPACA's upcoming nondiscrimination rules and with carriers' increasing scrutiny around minimum participation requirements it does make sense that some employers would auto-enroll employees in order to avoid running afoul of the myriad of rules and regulations shot at them under reform. 

This is from Michelle Andrews at Kaiser Health News:
Under the health law, large employers that don’t offer their full-time workers comprehensive, affordable health insurance face a fine. But some employers are taking it a step further and requiring workers to buy the company insurance, whether they want it or not. Many workers may have no choice but to comply. 
Some workers are not pleased. One disgruntled reader wrote to Kaiser Health News: “My employer is requiring me to purchase health insurance and is automatically taking the premium out of my paycheck even though I don’t want to sign up for health insurance. Is this legal?” 
The short answer is yes. Under the health law, employers with 100 or more full-time workers can enroll them in company coverage without their say so as long as the plan is affordable and adequate. That means the employee contribution is no more than 9.5 percent of the federal poverty guideline and the plan pays for at least 60 percent of covered medical expenses, on average. 
“If you offer an employee minimum essential coverage that provides minimum value and is affordable, you need not provide an opt out,” says Seth Perretta, a  partner at Groom Law Group, a Washington, D.C., firm specializing in employee benefits. ...