Mandatory Automatic Enrollment: Smart First Steps

Source: Deloitte, Issue Brief # 25, January 12, 2011

From the summary:
Employers with more than 200 full-time employees that are subject to the Fair Labor Standards Act (FLSA) will have to establish an automatic enrollment program for their group health plans. The automatic enrollment program will be used to enroll new full-time employees and to continue the enrollment of current employees who do not affirmatively opt-out of coverage.

There will be a notice requirement that must be satisfied by each automatic enrollment program. Additionally, each automatic enrollment program will have to include an option for individuals to opt-out of coverage in which they have been automatically enrolled. The Department of Labor is expected to issue detailed guidance on these and other requirements.

State wage-garnishment and similar payroll-related laws are preempted to the extent they otherwise would preclude an employer from implementing an automatic enrollment program.

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