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Complying with the 90-day Waiting Period Limit

Learn how your company can remain in compliance with the 90-day Waiting Period limit that is set out by the Affordable Care Act.On March 21, 2013, a proposed rule on the 90-day waiting period limit that is set by the Affordable Care Act was issued that would apply to plan years beginning on or after Jan. 1, 2014.

To help companies understand if they will be in compliance with this proposed rule, we’re happy to share clarification, examples, and a free White Paper below.

What is the Waiting Period?

The limit set by the ACA prevents an eligible employee (or dependent) from having to wait more than 90 days before coverage under a group health plan becomes effective.

An employee or dependent is eligible for coverage when he or she has met the plan’s eligibility conditions. Those conditions may include achieving a specific job classification or achieving license-related requirements.

Examples of How Companies Can Remain Compliant

Below are four examples that demonstrate scenarios that your company may face when it comes to complying with the 90-day waiting period limit.

 

Example 1

Facts: A group health plan provides that full-time employees are eligible for coverage under the plan. Employee A begins employment as a full-time employee on Jan. 19.

Conclusion: Any waiting period for A would begin on Jan. 19 and may not exceed 90 days. Coverage under the plan must become effective no later than April 19 (assuming February lasts 28 days).

 

Example 2

Facts: A group health plan provides that only employees with job title M are eligible for coverage under the plan. Employee B begins employment in job title L on Jan. 30.

Conclusion: B is not eligible for coverage under the plan, and the period while B is working in job title L and therefore not in an eligible class of employees is not part of a waiting period under the proposed rule.

 

Example 3

Facts: Same facts as Example 2, except that B transfers to a new position with job title M on April 11.

Conclusion: B becomes eligible for coverage on April 11, but for the waiting period. Any waiting period for B begins on April 11 and may not exceed 90 days. Coverage under the plan must become effective no later than July 10.

 

Example 4

Facts: A group health plan provides that only employees who have completed specified training and achieved specified certifications are eligible for coverage under the plan. Employee C is hired on May 3 and meets the plan’s eligibility criteria on Sept. 22.

Conclusion: C becomes eligible for coverage on Sept. 22, but for the waiting period. Any waiting period for C would begin on Sept. 22 and may not exceed 90 days. Coverage under the plan must become effective no later than Dec. 21.

 

Additional Examples

I hope that you find these examples helpful as you to seek to ensure that your company is compliant with 90-day Waiting Period Limit under the Affordable Care Act.

Of course, there are more scenarios that you may run into. To download our more detailed Legislative Brief that provides additional information on how your company may be impacted by this law, please fill out the form below:

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