The Bipartisan Budget Act includes the following important employee-benefit related provisions:
- It repeals the automatic enrollment mandate of the Affordable Care Act. Under the ACA, employers with more than 200 full-time employees were required to enroll automatically their employees in the employer's health plan. Employees may affirmatively elect to opt-out of such automatic enrollment. The ACA provision was to be activated by regulations issued by the Department of Labor. Regulations were never issued.
Action Item: If you manage benefits for an employer that has more than 200 employees, breathe a modest sigh of relief. Although automatic enrollment is still an available option, it can increase an employer's health plan related costs significantly. Policies regarding automatic enrollment should be reviewed and changed if necessary or desirable.
- It sets forth a new schedule of Pension Benefit Guaranty Corporation (PBGC) premiums for single employer defined benefit plans. Under the Bipartisan Budget Act, fixed rate premiums will increase from $64 per participant currently to $80 by 2019. Variable rate premiums for underfunded plans are also affected.
Action Item: For any employer with a defined benefit pension plan, reporting and payments systems should be reviewed and adjusted to reflect the new premium rates.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
