This fall, the Government announced a one-year delay in the employer mandate provisions of the Affordable Care Act (under which employers with 50 or more employees will be required to pay a penalty if they do not offer affordable coverage). This led some employers to believe that they do not have to worry about the Affordable Care Act until the 2015 plan year. However, the rule that imposes a maximum 90-day period on how long an otherwise-eligible employee can be required to wait before being covered by an employer’s group health plan is effective in 2014.
The 90-day waiting period restriction applies to all group health plans—regardless of size, whether insured or self-insured, and whether or not grandfathered. It becomes effective for plan years beginning on or after January 1, 2014. This means that, for employers with calendar year plans, otherwise eligible employees who have completed 90 days of employment as of January 1, 2014 must be allowed to enter the plan on that date. Note that an eligibility provision that allows an employee to enter the employer’s plan on the first day of the month following 90 days of employment does not satisfy the rule.
Beginning in 2014, it is also important for large employers (50 or more employees) to develop a system for identifying and tracking full-time and part-time employees. While the reporting obligations do not take effect until 2015, in many cases employers should be tracking hours during the 2014 plan year. Unfortunately, the Affordable Care Act rules for determining full-time and part-time status are complicated.
Please contact us with questions on this or any other provisions of the Affordable Care Act.
| Bob Kellner|
| Jim Kimble|