ACA Waiting Periods: What Employers Need to Know

The Affordable Care Act (ACA) continues to be a source of confusion and frustration for employers. With the many delays and after-the-fact rulings, it’s hard for business owners and HR professionals alike to stay up to date on all things health care reform. One such ruling that many employers still find have questions on is the one regulating waiting periods for group health plans.

The ACA prohibits group health plans and group health insurance issuers from applying any waiting period that exceeds 90 days. In February of this year, final regulations were released regarding the 90-day waiting period limit, which will go into effect for plan years beginning on or after January 1, 2015.

Things employers need to know:

• A “waiting period” is defined as the period of time that must pass before coverage becomes effective for an employee or dependent who is otherwise eligible to enroll in the plan.
• Under the ACA, all calendar days are counted beginning on the enrollment date, including weekends and holidays.
• The waiting period limit only prevents an otherwise eligible employee (or dependent) from having to wait more than 90 days before coverage becomes effective – it does not require an employer to offer coverage to any particular employee or class of employees.
• Employers who require first-of-month timing due to administrative purposes will be required to offer coverage on the first of the month following the 60 days of hire in order to remain ACA-compliant.
• An employee or dependent is otherwise eligible to enroll in a plan when he or she has met the plan’s eligibility conditions. Examples of permissible eligibility conditions included in the regulations include:
  • Being in an eligible job classification.
  • Achieving job-related licensure requirements specified in the plans terms.
  • Satisfaction of a reasonable and bona fide employment-based orientation period.
  • The final regulations do not specify the circumstances under which the duration of an orientation period would not be considered “reasonable” or “bona fide.” However, separate proposed regulations published at the time of the final regulations propose one month as the maximum length of any orientation period.
  • Former employees who are rehired may be treated as newly eligible for coverage upon rehire, and therefore be required to meet the plan’s eligibility criteria and satisfy the plan’s waiting period again, if reasonable under the circumstances. This same analysis would apply to individuals who move to a job classification that is ineligible for coverage under the plan but then later moves back to an eligible job classification.

For more information on the ACA 90-day waiting period, download G&A Partners’ latest Health Care Bulletin: Final Regulations Released on the 90-day Waiting Period Limit.

If your business is still struggling to navigate the Affordable Care Act, G&A Partners can help. G&A is like a Million Dollar Employee – without the million-dollar price tag. Check out how G&A Partners and the Million Dollar Employee helped Greg find relief from health care reform in the latest MDE video!