Automatic Enrollment Will Burden Retail Industry Due To High Turnover Rates

The Patient Protection and Affordable Care Act’s (ACA) automatic enrollment provision forces employers to automatically enroll employees into a health plan that they may not want or need, according to the Retail Industry Leaders Association (RILA). The group recently endorsed legislation introduced by Sen. Johnny Isakson (R-GA) that repeals the automatic enrollment provision of the ACA. The bill, the Auto Enroll Repeal Act (S. 2546) reduces the complex administrative challenges imposed on retailers under the health law.

“RILA appreciates Senator Isakson’s leadership in repealing this provision under the Patient Protection and Affordable Care Act (ACA) which forces employers to automatically enroll an employee into a health plan that he or she may not want or need,” said Christine Pollack, vice president of government affairs at RILA.

In a recent letter to Senator Isakson, RILA states that under the automatic enrollment provision, employers with workforces of 200 or more must automatically enroll employees in health coverage plans if one is not voluntarily chosen or coverage is not declined by an employee. Automatic enrollment may cause substantial confusion for employees who may already be eligible for coverage under a spouse’s plan, a parent’s plan, or a government plan.

Additionally, automatic enrollment would cause significant administrative burdens to businesses in the retail industry due to the high turnover rates of their workforces, RILA contends.

“The automatic enrollment provision is duplicative of the law’s individual and employer mandates. As retailers work to comply with the law it is important that Congress make commonsense adjustments and repeal provisions such as auto enroll which will be too administratively burdensome and complex for retailers to comply with and for the federal government to implement,” Pollack said.

In February 2012, the Department of Labor (DOL) acknowledged employer concerns about the complexities associated with implementing this provision (Notice 2012-17). The DOL has not yet issued regulations for this requirement.

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