Agencies Issue FAQs on Automatic Enrollment, Employer Shared Responsibility, and Waiting Periods

On February 9, 2012, the U.S. Departments of Labor, Health and Human Services, and the Treasury released a set of Frequently-Asked-Questions (“FAQs”) relating to the  Patient Protection and Affordable Care Act’s (“PPACA”) requirements for automatic enrollment, employer shared responsibility, and the 90-day limitation on waiting periods for health coverage.  The PPACA originally required employers with more than 200 full-time employees to automatically enroll new full-time employees in health coverage by 2014.  However, the FAQs provide that guidance on the PPACA’s automatic enrollment requirement will not be issued by 2014, and extends the compliance date for this requirement until final regulations are issued and effective.  The FAQs also clarify that the PPACA’s prohibition of waiting periods of more than 90-days does not require employers to offer group health coverage to any group of employees.  The FAQs also state that detailed guidance will be issued regarding the PPACA’s shared responsibility requirements, and clarify that employers will be given at least three months in which to determine whether a newly-hired employee is a “full-time” employee for purposes of these requirements, which beginning in 2014, will require employers with more than 50 employees who do not offer group health coverage to pay a penalty if any of their employees are eligible for a tax credit to help them afford the cost of health coverage.