Second Opinions

SECOND OPINIONS: Hurry Up and Wait: ACA Final Waiting Period Rules

June 4, 2014 ( - The Patient Protection and Affordable Care Act (ACA) requires that, for plan years on or after 1/1/14, group health plans may not impose a waiting period of more than 90 days.

By PS | June 04, 2014
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Treasury, 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 to impose?

Under 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?

The 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?

The 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.