Automatic Enrollment Q&A


May an employer impose a waiting period for new full-time employees who are automatically enrolled in coverage?

Yes. Automatic enrollment is subject to any applicable waiting periods authorized by law.
Waiting periods in excess of 90 days will be prohibited under the ACA starting in 2014.

May an employee opt out of coverage?

Yes. Employees must be given adequate notice regarding automatic enrollment and the opportunity to opt out of coverage.

Do the automatic enrollment requirements apply to health plans or health insurance issuers?

No. This requirement is applicable to employers.

What is a full-time employee?

The ACA does not define full-time employee for purposes of the automatic enrollment provision.  However, for purposes of the ACA's employer mandate, a full-time employee is an employee who performs, on average, at least 30 hours of service per week.  The agencies have indicated that these two definitions will be coordinated.

Into what plan must a full-time employee be automatically enrolled? (For example, the plan with the lowest premium?)

This is unclear. It is expected that regulations will clarify this issue.

How does the automatic enrollment provision impact compliance with state payroll laws?

Any applicable state laws regarding payroll, such as permissible deductions of wages, will continue to be in effect except to the extent the state laws prohibit employers from implementing automatic enrollment.

When are the automatic enrollment provisions effective?

On December 23, 2010 HHS released an FAQ confirming that employers are not required to comply with this new provision until regulations are issued by the Secretary of Labor. In Technical Release 2012-01, issued February 9, 2012, the Department of Labor reported that the regulations will not be ready to take effect by 2014 and that employers are not required to comply with the automatic enrollment provision until final regulations are issued and become applicable.

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