Final Rules on 90-Day Waiting Period Limitation for Group Health Plans

Final Rules on 90-Day Waiting Period Limitation for Group Health Plans

Final rules address the requirement in the Affordable Care Act that group health plans limit any waiting period to 90 days beginning with plan years starting on or after January 1, 2014. A waiting period is the period of time that must pass before coverage for an employee or dependent who is otherwise eligible to enroll under the terms of a group health plan can become effective.

Key Highlights of the Final Rules
Under the final rules, eligibility conditions that are based solely on the lapse of a time period are permissible for no more than 90 days. Other conditions for eligibility are generally permissible, such as:

• Meeting certain sales goals;
• Earning a certain level of commission; or
• Successfully completing a reasonable and bona fide employment-based orientation period.

A requirement that employees complete a certain number of cumulative hours of service before becoming eligible for coverage is also generally allowed, as long as the requirement does not exceed 1,200 hours. Other highlights of the final rules include:

• Employers are not required to offer coverage to any particular individual or class of individuals (including, for example, part-time employees).
• All calendar days are counted for purposes of the 90-day limit, including weekends and holidays, beginning on the individual’s enrollment date.
• A former employee who is rehired may be treated as newly eligible for coverage upon rehire and, therefore, may be required to meet the plan’s eligibility criteria and satisfy the waiting period anew, if reasonable under the circumstances.

For plan years beginning in 2014, plans may comply with either the previously proposed regulations or the final rules (effective for plan years beginning on or after January 1, 2015).

Be sure to review our Summary by Year for other key changes under the Affordable Care Act taking effect in 2014.