Art: hr3590.com
Employer group health plans must eliminate waiting periods of more than 90 days before enrolling otherwise eligible employees (or dependents) into health coverage, under proposed rules issued on March 18 by the federal agencies implementing health reform.
For Clear Full-time Hires, It’s 90 Days
Group health plans and health insurers in the group plan setting may not apply any waiting period that exceeds 90 days, the rules jointly issued by the departments of Labor, Health and Human Services and Treasury say. Plans and insurers are not required to have any waiting period. They could obviously have shorter waiting periods without violating the requirement, the proposal states. And if an worker failed to enroll within 90 days of his or her own accord, that would not count as a violation.
Waiting Period May Last 13 Months When FT Status Unclear
The proposed rule provides that if it takes more than 90 days to determine whether an variable-hour worker is full-time or part-time, the maximum waiting period could be lengthened to accommodate the time it takes to make that determination.
Note: The rules on measuring full time employees allows for measurement periods of three to 12 months to determine average hours per week worked. The full-time/part-time distinction is key to health plan eligibility, because larger employers are required to offer health coverage to full-time workers, defined as 30 hours per week or more under the health reform law.
The enrollment time limit in such cases would be the measurement period, plus 90 days, up to 13 months from the employee’s start date. Employers even could get 13 months and a few extra days under the following scenario: the employee enrolls after the first day of the month, for example on the 7th or 15th. Then the employee is seen as enrolling on the first of the next month; then the employer can make an offer of coverage as many as 13 months from the first day of THAT month, the proposed rule stated.
Some Non Time-based Criteria Allowed
The proposal is meant to regulate restrictions that are based solely on the lapse of time. If a plan’s reasonable eligibility rules (not time-lapse based) take the date beyond 90 days, the rule would permit this, as long as the plan’s rule is not designed to skirt the 90-day requirement.
Example: Meeting certain sales goals or earning a certain level of commission, can be seen as eligibility provisions that do not trigger the 90-day waiting period limitation.
A minimum number of cumulative hours of service may be imposed as a condition for eligibility without triggering the 90-day rule, provided the cumulative hours of service requirement does not exceed 1,200 hours. Once the employee satisfies the cumulative hour minimum, the employer can tack on the 90-day waiting period without violating the requirement. But the employer may not repeat the process on the same employee.
For more information on health plan and insurer obligations under health reform, see Section 300 of the Health Reform Law: What Employers Need to Know.