Health and Human Services (HHS), and the Department of Labor (DOL) had issued proposed
rules in March 2013 and issued final rules earlier this year. 79 Fed. Reg. 10296 (Feb. 24, 2014). Below we address questions concerning the
waiting period requirements and, in particular, how these rules interact with
the ACA shared responsibility rules under Internal Revenue Code section 4980H,
effective for most plans as of 1/1/15.
What waiting period are plans permitted
the ACA, a group health plan may not impose a waiting period of more than 90
days. The final regulations define a
“waiting period” as the period that must pass before coverage for an individual
who is otherwise eligible to enroll under the terms of the group health plan
can become effective. The rules clarify
that 90 days means calendar days, including weekends and holidays.
To which plans does this rule apply?
rule applies to group health plans that are subject to the other insurance
market reform rules under the ACA, including ERISA group health plans, health
insurance issuers, governmental health plans, and church health plans. The rule does not apply to benefits that are
considered “excepted benefits” under HIPAA, such as stand-alone dental and
vision coverage, EAPs, supplemental coverage, or disease-only policies that
meet the HIPAA excepted benefits requirements.
When does the waiting period start?
90-day waiting period must start when an individual has met the plan’s
substantive eligibility conditions, such as being in an eligible job
classification or obtaining a required license, as long as the eligibility
condition is not designed to avoid compliance with the 90-day rule. In addition, a plan may require that an
employee completes a minimum amount of cumulative hours of service in order to
eligible, as long as the number of hours does not exceed 1,200 hours. The rules provide that other eligibility
conditions “based solely on the lapse of time” only are permissible if they are
no more than 90 days.