by Phil Larson
Under the Affordable Care Act, two main provisions come to mind when you think about "when" you offer coverage. The first is the Employer Fair Share Requirement, the second is the prohibition on waiting period eligiibility rules beyond 90 days.
The 90 day rule is very broad, applying to all eligible individuals under the plan. It is not limited to full-time participants. However, these rules do not limit other conditions on eligibility, like obtainign a required certification. These rules are about eligibility limits involving the passage of time but do not apply to excepted benefits.
The 90 day rule is a strict 90 days, providing coverage the first of the month after 90 days is not allowed. Also, providing coverage after three months is not allowed as some months total may be beyond 90 days.
[UPDATE: In June 2014, IRS, DOL and HHS final regulations were passed on the 90 days rule and proposed regulations were passed on the use of "employment based orientation periods." The rules allow an orientation period imposed as a condition for eligibility under a health plan and state it will be consistent with the 90-day waiting period limitation if the following conditions are met:
The rules also state that compliance with these rules does NOT mean compliance with the employer mandate provisions under 4980H.]
The 90 day rules are also subject to tighter timeframes under state law. California recently passed an insurance requirement preventing waiting periods over 60 days. This means if a plan wants to start coverage on the first of the month, they may need to provide coverage close to 30 days. [Please note, after this blog post, California repealed it's law so that it now matches the federal rules on waiting period limits for employers. This passed on August 15th, 2014 under Senate Bill 1034.]
If you need help understanding these rules, please contact Kinney & Larson.
Under the Affordable Care Act, two main provisions come to mind when you think about "when" you offer coverage. The first is the Employer Fair Share Requirement, the second is the prohibition on waiting period eligiibility rules beyond 90 days.
The 90 day rule is very broad, applying to all eligible individuals under the plan. It is not limited to full-time participants. However, these rules do not limit other conditions on eligibility, like obtainign a required certification. These rules are about eligibility limits involving the passage of time but do not apply to excepted benefits.
The 90 day rule is a strict 90 days, providing coverage the first of the month after 90 days is not allowed. Also, providing coverage after three months is not allowed as some months total may be beyond 90 days.
[UPDATE: In June 2014, IRS, DOL and HHS final regulations were passed on the 90 days rule and proposed regulations were passed on the use of "employment based orientation periods." The rules allow an orientation period imposed as a condition for eligibility under a health plan and state it will be consistent with the 90-day waiting period limitation if the following conditions are met:
- the orientation period does not exceed one month. One month is determined by adding one calendar month and subtracting one calendar day, measured from the employee’s start date; and
- the 90-day waiting period begins on the first day after the orientation period
The rules also state that compliance with these rules does NOT mean compliance with the employer mandate provisions under 4980H.]
The 90 day rules are also subject to tighter timeframes under state law. California recently passed an insurance requirement preventing waiting periods over 60 days. This means if a plan wants to start coverage on the first of the month, they may need to provide coverage close to 30 days. [Please note, after this blog post, California repealed it's law so that it now matches the federal rules on waiting period limits for employers. This passed on August 15th, 2014 under Senate Bill 1034.]
If you need help understanding these rules, please contact Kinney & Larson.