The administration doesn’t mind taking the occasional detour on its route to health reform implementation, it seems, perhaps because until the Supreme Court decides on the constitutionality of its “individual mandate” (oral arguments will be March 27), the fate of the law’s employer provisions has to be considered uncertain.
Backpedaling also may be occurring with some requirements as the administration hears from the business community and other entities about concerns on tight time frames for compliance, implementation processes, etc.
The stay of automatic enrollment enforcement for big business makes it look that way. A few days ago, the U.S. Department of Labor (DOL) postponed until 2014 a provision requiring larger companies (that employ 200 or more full-time workers) to automatically enroll all eligible full time employees in health plans. The health reform law (PPACA) added the requirement to Section 18A of the Fair Labor Standards Act (FLSA).
In Technical Release 2012-01, DOL said no compliance will be required until the departments write rules on auto-enrollment, and rules couldn’t be prepared until 2014.
The need for coordinated guidance and a smooth implementation process, including an applicability date that gives employers sufficient time to comply, [DOL] has concluded that its automatic enrollment guidance will not be ready to take effect by 2014. It remains [DOL’s] view that, until final regulations under FLSA Section 18A are issued and become applicable, employers are not required to comply with FLSA section 18A.
So a weight is lifted from employers’ shoulders.
The story started out similarly but ended differently for the summaries of benefits and coverage (SBC) that employers are obligated to prepare and distribute. There was a several-month delay, and after a proposed rule came out in August 2011, people were predicting that no one would have to comply with the SBC through calendar year 2012. But the agencies turned that job around quickly, and SBCs will be alive and kicking for plan years that start Sept. 23, 2012 and later. That said, this study shows less than half of employers are ready to distribute SBC materials.