DOL: PPACA Final Rules on 90 Day Waiting Period
Today the U.S. Departments of Labor, Treasury, and Health and Human Services have announced the publication of final regulations implementing a 90-day limit on waiting periods for health coverage. Under PPACA (the Patient Protection and Affordable Care Act), employers and plan sponsors are prohibited from sponsoring/offering health plans that have waiting periods in excess of 90 days (for the first plan year on/after January 1, 2014).
Assistant Secretary of Labor for Employee Benefits Security Phyllis C. Borzi, states that “[t]his is a common sense measure that helps workers access employer-sponsored health insurance while providing employers flexibility.”
The final regulations require that no group health plan or group health insurance issuer impose a waiting period that exceeds 90 days after an employee is otherwise eligible for coverage. The rules do not require coverage be offered to any particular individual or class of individuals.
To ensure that eligibility conditions based solely on the passage of time are not used to evade the waiting period limit, the rules state that such conditions cannot exceed 90 days. Other conditions for eligibility are generally permissible, such as meeting certain sales goals, earning a certain level of commission, or successfully completing an orientation period.
Additionally, requiring employees to complete a certain number of hours before becoming eligible for coverage is generally allowed as long as the requirement is capped at 1200 hours. The rules also address situations in which it cannot be determined that a new employee will be working full-time.
The departments are issuing a companion proposed rule that would limit the maximum duration of an otherwise permissible orientation period to one month. This proposal will be open for public comment.
Both 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.