February 21, 2014
Federal Regulators (the Departments of Labor, Treasury, and Health and Human Services) announced yesterday, February 20, that they are releasing Final Regulations implementing the Affordable Care Act’s (ACA) 90-day limit on waiting periods for group health insurance coverage. The Final Regulations will be released in the Federal Register on Monday, February 24.
The final regulations appear to track prior guidance relating to the 90-day waiting period rules. Despite many comments from employers, insurance carriers and others familiar with how group health plans are operated in the employer environment, the regulators did not adopt relief that would allow coverage to be available as of the “first day of the month” or “first pay period” following 90 days. Rather, the final regulations reaffirm that coverage must be offered within 90 days and, if elected, coverage must begin no later than on the 91st day after the employee becomes eligible for coverage.
The final regulation continues to permit non-time-period-based conditions for eligibility, such as meeting certain sales goals or earning a certain level of commissions. Requiring otherwise eligible employees to complete a set number of hours before becoming eligible for coverage is also generally allowed but any hours requirement cannot exceed 1200 hours.
Proposed regulations will be also released in the Federal Register on Monday. The proposed regulation provide rules for “orientation periods”—a period of time in which the employer and the employee are evaluating the position. Under the proposed rule, orientation periods can be used but cannot exceed one month. We will continue to track and update ACA developments.
The final and proposed rules will be published in the Feb. 24, 2014 edition of the Federal Register and can also be viewed at the links below.
Final rule,http:/ /www.dol.gov/opa/media/press/ebsa/20140220 -redfeg1.pdf .
Notice of proposed rulemaking, http:/ /www.dol.gov/opa/media/press/ebsa/20140220 -redfeg2.pdf.
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