Solution to 90 Day Waiting Period Concerns
(Final Rule Might Have A Creative Solution)

Final-Regulations-Released-on-the-90-day-Waiting-Period-LimitOne of the more popular waiting periods for medical insurance plans has long been “first of the month following a 90 day waiting (probationary) period”. In reality that common approach often can result in a new employee waiting a bit longer than 90 days, until the first of the next month after the 90 days. As of January 2014 the new healthcare reform law required that an employee must be added no later than 90 days from the date of hire and thus many groups have changed their waiting period to 60 days so as to comply with the laws initial provisions.

At the end of February (2014) the Department of Labor (finally) issued exact rules and over the last two months experts have found some interesting details including a way use an orientation period to extend one’s waiting period. In last week’s Morris & Reynolds’ April 2014 Healthcare Reform Webinar reform expert and benefits attorney Becca Kopps discussed the final rules and the orientation period. A few of our clients have had some excellent follow-up questions and we’ve had Becca address those questions in an answer that we feel will be helpful to many businesses. Here’s her answer (read about the ‘reasonable and bonafide employment-based orientation period’ that starts in the second full paragraph):

90-day-Waiting-Period-LimitUnder the ACA’s 90-day waiting period, eligibility conditions that are based solely on the lapse of time are permissible for no more than 90 days. However, other eligibility conditions that are not based solely on the lapse of time are generally allowed, unless the condition is designed to avoid compliance with the 90-day waiting period limit. Some examples of permissible eligibility conditions include:

  • Being in an eligible job classification; or
  • Achieving job-related licensure requirements specified in the plan’s terms.

The final rules on the 90-day waiting period limit added a third example of a permissible eligibility condition, allowing the satisfaction of a reasonable and bona fide employment-based orientation period. This means that a requirement to successfully complete a reasonable and bona fide employment-based orientation period may be imposed as a condition for eligibility for coverage under a plan. During an orientation period, the Departments envision that:

  • An employer and employee could evaluate whether the employment situation was satisfactory for each party; and
  • Standard orientation and training processes would begin.

Separate proposed regulations published at the same time as the final regulations propose one month as the maximum length of any orientation period. This one-month maximum is generally a period that begins on any day of a calendar month, and is determined by adding one calendar month and then subtracting one calendar day. If there is not a corresponding date in the next calendar month upon adding a calendar month, the last permitted day of the orientation period is the last day of the next calendar month.

If a group health plan conditions eligibility on completing a reasonable and bona fide employment-based orientation period, the eligibility condition would comply with the 90-day waiting period limitation if the orientation period did not exceed one month. The maximum 90-day waiting period would begin on the first day after the orientation period.

In order to provide you with as many resources as possible I’ve attached our firm’s newsletters on the 90 Day Waiting Period Limit, as well as the Final Regulations Released on the 90 Day Waiting Period Limit, the latter being ‘hot’ off the press. I expect that the legal community will soon begin to have more comments about this final rule, but all of us here at Morris & Reynolds wanted to place you, again, on the cutting edge of healthcare reform information.

Should you have any questions about the Final Rule or anything else please contact us as we are happy to help.

Trusted Insurance

"Savings & Service Has Been Our Policy Since 1950"
14821 South Dixie Highway, Miami, Florida 33176
P 305.238.1000 | F 305.255.9643
E info@morrisandreynolds.com

Independent agent