90 and under ONLY!

On March 18, 2013, the Departments of Labor, Treasury, and Health and Human Services issued proposed guidance regarding eliminating waiting periods in excess of 90 days for employees who are eligible for their company’s health insurance plan. A waiting period is defined as the time that must pass before an employee can be covered under a plan. This guidance is effective January 1, 2014, and remains in effect at least through December 31, 2014.

For plan years beginning on or after January 1, 2014, a waiting period for employees and dependents who are otherwise eligible for coverage under an employer’s group health plan cannot be longer than 90 calendar days, including weekends and holidays. Plans will no longer be able to use a “three month” waiting period as it might exceed 90 calendar days. This also means that employers can no longer use a waiting period in which coverage begins the first of the month following 90 days of service.

The proposed regulations also clarify how this provision applies to variable-hour employees where plan eligibility is based upon a specified number of hours worked. A plan is considered in compliance with the waiting period requirement if the hours of service required for eligibility for coverage under the plan do not exceed 1,200 hours. Note: This requirement cannot be re-applied to the same individual each year.