Temporary Guidance Issued on 90-day Waiting Period Limit
New temporary guidance has been released regarding the 90-day maximum waiting period mandated by the Affordable Care Act (ACA). The ACA stipulates that for plan years beginning on or after Jan. 1, 2014, group health plans and group health insurance issuers may not apply any waiting period that exceeds 90 days.This temporary guidance, Notice 2012-59, was issued on Aug. 31, 2012, and will remain in effect at least through the end of 2014. According to the guidance, 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 your plan can become effective. Employees and dependents are eligible when they have met your plan’s eligibility conditions, as specified in your plan’s terms. Any eligibility condition that is based solely on the lapse of time cannot be longer than 90 days.As long as a plan enables an employee to elect coverage that would begin within the 90-day limit, the plan is not in violation of this stipulation. Therefore, a plan is not in violation merely because an employee takes time to elect coverage. If your plan’s eligibility depends on a specified number of hours per pay period, and you are unable to determine whether a newly-hired employee will satisfy the requirements, the guidance states that you may take a reasonable period of time to determine whether the employee is eligible. This measurement period will comply with ACA’s waiting period limit if coverage is made effective no later than 13 months from the employee’s start date, unless a waiting period of more than 90 days is imposed after the period. For example situations or more information, contact CFR, Inc.