United Benefit Advisors Insight and Analysis Blog

What You Need to Know About the New Eligibility Waiting Period Provisions

By Bill Olson, VP, Marketing & Communications at United Benefit Advisors
  Jan 29, 2014 3:25:00 PM

benefit communicationThe 90-day maximum for eligibility waiting periods is effective as of the start of the 2014 plan year.  As employers are beginning to implement this new requirement, many have questions. For instance, what should employers do if they hired an employee under the prior rules?  

The 90-day limit applies as of the start of the 2014 plan year, even for those hired under the prior plan rules. This means that an employee who had worked 90 days by the start of the 2014 plan year must be covered as of the start of the year. Those who had worked fewer than 90 days must be credited with all time worked.

Here are some examples to help explain this scenario:

Ellen was hired October 2, 2013. Ellen’s employer has a calendar year plan and during 2013 it used a “first of the month after 90 days of employment” waiting period. Ellen must be offered coverage on January 1, 2014, because she will have completed at least 90 days of employment by that date.

Fred was hired October 22, 2013, to work part-time. Fred’s employer has a calendar year plan and during 2013 it used a six month waiting period. Fred must be offered coverage with an effective date on or before January 20, 2014, because that is Fred’s 91st day of employment. (It does not matter that Fred works part-time because the waiting period limit applies to both part-time and full-time employees.)

Jane was hired December 10, 2013, and Jim was hired January 29, 2014. Jane and Jim’s employer has a May 1 plan year and has been using a “first of the month after 90 days” waiting period. The employer is switching to a “first of the month after 45 days” waiting period as of May 1, 2014. Jane must be offered coverage with an effective date of April 1, 2014 (because the first of the month after 90 days is allowable for Jane’s employer until May 1). Jim must be offered coverage with an effective date of May 1, 2014, because Jim will have completed 90 days of employment by then.

United Benefit Advisors (UBA) has created a Patient Protection and Affordable Care Act (PPACA) Advisor that addresses a number of other recurring questions about this new provision that include, but are not limited to:

  • Does PPACA affect eligibility waiting periods?
  • May a plan use a 3-month waiting period?
  • May a plan impose a probationary period or cumulative service requirement before applying a waiting period?
  • May a plan allow employees to buy or bank hours toward an “hours of service for eligibility” requirement?

Click here to access the Frequently Asked Questions (FAQ) about waiting periods resource.

Topics: ACA, employee benefits, PPACA, administration, eligibility waiting periods, benefit communication, benefit consultants, benefit management, compliance with health care reform, employee health, group health insurance, healthcare consumerism, health plan compliance, medical plan