Agencies Issue Guidance on Waiting Periods


Under the ACA, effective for plan years beginning on or after January 1, 2014, a group health plan may not have a waiting period that exceeds 90 days.  The ACA’s statutory language raised many questions regarding how this 90-day limit on waiting periods should be measured.  Notice 2012-17 continues to leave many of those questions unanswered, but it confirms that future regulations will incorporate the existing regulatory definition of “waiting period.”

Under those existing regulations, a waiting period is defined as the period that must pass before coverage for an employee or dependent who is otherwise eligible to enroll under the terms of a group health plan can become effective.  This suggests that other eligibility conditions that are not based solely on the lapse of a time period (such as full-time vs. part-time status, or bona fide job categories) will still be permitted.  In fact, the FAQs specifically state that nothing in the waiting period rules will require employers to offer coverage to part-time employees or to any other specific category of employees.

The Departments of Labor, Health and Human Services, and Treasury intend to issue guidance addressing the coordination of the employer shared responsibility provision with the 90-day waiting period limitation.  That guidance is expected to provide that, at least for the first three months following an employee’s date of hire, an employer will not be subject to a shared responsibility tax penalty merely because it fails to offer coverage to the employee during the waiting period.

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