On March 18. 2013, the U.S. Department of Health and Human Services, the Department of Labor, and the Treasury (Agencies) have issued proposed regulations on the application of the 90 day waiting period limitation in the Patient Protection and Affordable Care Act (PPACA). Under PPACA, waiting periods in excess of 90 days are prohibited. The proposed regulations clarified that 90 days means 90 days, including holidays and weekends. Not 3 months, not first of the month following 90 days of employment. There is no de minimis exception for those one or two days in excess of 90 days if 3 calendar months are used. This requirement applies to all plans (both grandfathered and non-grandfathered) for plan years beginning on or after January 1, 2014.
However, there is some light at the end of the 90 day tunnel for employers. The Agencies clarified that employers may use other “substantive eligibility criteria” as long as these criteria are not designed to avoid compliance with the 90 day waiting period limit. For example, coverage may be conditioned upon completing certain training, obtaining a certain job classification or working a specified cumulative number of hours (e.g. 1200). Under these scenarios, the 90 day clock would not begin to tick until the employee has satisfied the eligibility criteria. If a plan conditions eligibility on working full time hours, employers may use a measurement period to determine an employee’s full time status. Employers should remain cautious and be aware of the Employer Mandate provisions of PPACA. If an employee works 30 or more hours per week but is not considered eligible for coverage until the employee has achieved a certain eligbility criteria, the employer may be in compliance with the 90 day waiting period requirement but still subject to a penalty for failing to offer a full time employee coverage within the first 90 days of employment.
The Agencies are accepting public comments to this proposed regulation though May 20, 2013. Click here for a copy of the proposed regulation or for more information on submitting a comment.
