New PPACA FAQs Propose Coordinated Rules for Identifying Full-Time Employees

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The tri-agency task force1 developing guidance under the Patient Protection and Affordable Care Act (PPACA) has released frequently asked questions (FAQs) on three important issues affecting employers’ group health plans: the mandatory automatic enrollment requirement, the rules for determining who are full-time employees (FT employees) for purposes of the employer shared responsibility provisions and the 90-day time limit on waiting periods for plan participation. Simultaneously issued as DOL Technical Release 2012-01, IRS Notice 2012-17 and an HHS Bulletin, the FAQs summarize proposals the agencies intend to include in future guidance to coordinate the definition of FT employee for purposes of these three rules and request comments on these proposals.

The FAQs announce a delay of the mandatory automatic enrollment requirement for FT employees. The automatic enrollment provision of section 18A of the Fair Labor Standards Act (FLSA), which was added by PPACA, requires FLSA-covered employers with 200 or more FT employees to automatically enroll each new FT employee in one of the employer’s health plans and to automatically re-enroll employees currently participating in one of the plans pursuant to regulations issued by the DOL. In December 2010, the agencies released FAQs indicating that guidance on these rules would be completed by 2014.

According to the latest FAQs, however, because the agencies plan to coordinate guidance on the definition of FT employee for purposes of the automatic enrollment rules, the shared responsibility rules and the 90-day limit on waiting periods, the DOL has concluded that the automatic enrollment guidance will not be released in time to become effective in 2014. The FAQs note that employers will not need to automatically enroll or re-enroll employees until final regulations are issued and applicable.

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Published In: Administrative Agency Updates, Health Updates, Labor & Employment Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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