Under the Affordable Care Act, employers offering group health insurance coverage may not have a waiting period that exceeds 90 days.
As part of the regulations related to that law, there is a “reasonable and bona fide employment-based orientation period” allowed. To help clarify what that means, the Departments of the Treasury, Labor, and Health and Human Services issued final regulations on June 23, 2014.
Overview of the Final Regulations
To help you understand your potential compliance requirements, here is a brief summary:
- The final rules confirmed that the maximum length of an orientation period is one month
- While a plan may impose substantive eligibility criteria, such as requiring the worker to fit within an eligible job classification or to achieve job-related licensure requirements, it may not impose conditions that are mere subterfuges for the passage of time
- The one-month orientation period will be determined by adding one calendar month and subtracting one calendar day, measured from an employee’s start date in a position that is otherwise eligible for coverage
Impact on the Employer Mandate?
In addition, employers should note that complying with the final orientation provision and the 90-day waiting period rule does not constitute compliance with the employer mandate rules.
To avoid a penalty for the latter, an applicable large employer must offer affordable minimum-value coverage to certain newly hired full-time employees by the first day of the fourth full calendar month of employment.
I hope that you find this summary helpful as you seek to understand your company’s compliance requirements under Health Care Reform.
If you have any questions, please give our team a call at 781-759-1222.