Open enrollment quandary: Forcing employees into the plan — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

Open enrollment quandary: Forcing employees into the plan

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The open enrollment season for the 2016 plan year is the first that involves full implementation of the Affordable Care Act’s (ACA) play- (i.e., offer full-time employees affordable group health benefits) or-pay (a free-rider penalty if even one employee gets individual coverage through an exchange and qualifies for a premium tax credit) provisions.

Upshot: Employers on the bubble of employing 50 full-time employees, and thus being subject to the play-or-pay requirements, may be looking for a strategy to ensure that they’re ACA compliant. One strategy that’s popped up on the Internet is forcing employees into the plan.

Can you force employees into the plan? The short answer is Yes, but you’ll have to make some changes to your cafeteria plan and, quite possibly, to your 401(k) plan, as well. In revenue ruling 2002-27, the IRS allowed a cafeteria plan to set up a negative option plan for employees, where employees must opt out...(register to read more)

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