Obama Signs Bill Eliminating ACA’s Auto-enrollment Requirement

Large employers with 200 and more employees will not have to automatically enroll their workforces into health plans, under budget legislation signed by President Obama. This Affordable Care Act provision was repealed because it was a low government priority and because business objected to it. Rules explaining the provision were never issued and it never took effect.

Budget legislation (Section 611 of the Bipartisan Budget Act of 2015) signed into law Nov. 2 by Obama, repeals health care reform’s automatic enrollment provision (29 U.S.C. 218a) of the Fair Labor Standards Act. This marks the second time in a month that Obama has signed legislation changing an ACA provision.

Rule Seen as Triggering Double Coverage

The now-repealed provision required employers with more than 200 employees to automatically enroll new full-time equivalents into a qualifying health plan if offered by that employer, and to automatically continue enrollment of current employees. It was intended to encourage enrollment by employees who might otherwise forgo doing so if they had to initiate enrollment on their own.

The requirement would have been confusing and caused complications for employees and employers, said Chatrane Birbal, a government relations expert for the Society for Human Resource Management. She said there were at least two problems with auto enrollment:

1. If employees were automatically enrolled in an employer’s health plan but had coverage under a spouse’s plan (or elsewhere), they might have ended up in a plan they did not need or want.
2. New employees could potentially lose access to health care providers they long depended on, because they were not ‘in-network” with the employer’s health plan, she said.

The U.S. Department of Labor never developed regulations for the requirement. The repeal takes away the need for DOL rules on where employers should auto-enroll workers if a plan has several coverage options, and what kind of notifications would go to affected employees.

This could indicate quickening pace of Congress repealing specific ACA requirements. The last instance was the PACE Act, repealing expansion of the small group market to employers with up to 100 employees and reverting to the previous definition of up to 50 employees. Future targets for change could include: (1) moving to a 40-hour definition of full-time worker for employer-mandate compliance and enforcement purposes; and (2) repealing the excise (Cadillac) tax on high-cost employer sponsored health plans.