On February 20, 2014, federal agencies released new rules for employer waiting periods. The final rule implements a 90 day waiting period as specified by the Affordable Care Act. The 90 day waiting period is a health insurance eligibility provision for small businesses. It mandates that coverage under a group health insurance plan be made available to “otherwise eligible” employees and their dependents no later than 90 calendar days from an employee’s eligibility date.
To comply with this requirement, insurance companies are issuing a “first of the month following 60 days” maximum waiting period. Insurance companies begin coverage on the first of the month, and some months have more than 31 days. The “first of the month following 60” guideline will not allow the employee to fall outside of the 90 day window.
The 90-day waiting period for health insurance provision applies to employers of all sizes and all plan types. This includes grandfathered plans and self-insured plans. The provision takes effect on the first day of the new plan year in 2014.
Details of the 90 day waiting period limit
- All calendar days count for purposes of the 90-day limit. This includes weekends and holidays, beginning on the individual’s enrollment date.
- The insurance coverage doesn’t specifically limit any particular individual or class of individuals.
- The requirement that employees complete a certain number of hours before becoming eligible for coverage is generally allowed. The requirement limit is 1,200 hours by the new provision.
- It’s the employers option if a re-hired employee needs to re-complete a waiting period or not. However, they may require the employee to meet the plan’s eligibility criteria and satisfy the waiting period, if reasonable under the circumstances.
- It may be a requirement to successfully complete a reasonable and bona fide employment-based orientation period. This “orientation period” may be a condition for eligibility for coverage under a plan.
For plan years beginning in 2014, plans may comply with either the proposed regulations or the final rule. The final rules are effective for all plan years beginning on or after January 1, 2015. Click here to read the official Department of Labor (DOL) news release and to read the final rule.
This information provided courtesy of Hometown Health.