New rules cap health insurance waiting period

The Obama administration has imposed a 90-day limit on waiting periods for health insurance coverage in keeping with market reform protections added by the Affordable Care Act.

"This is a common sense measure that helps workers access employer-sponsored health insurance while providing employers [with] flexibility," Phyllis C. Borzi, assistant secretary of labor for Employee Benefits Security, said yesterday in a U.S. Department of Labor announcement.

The final rules don't require offering health benefits to any particular person or category of people. But the rules prohibit group health plans and group health insurance issuers from making employees wait more than 90 days for coverage after they're otherwise eligible for it in plan years beginning on or after Jan.1, 2015.

So just as healthcare reform is affecting benefit designs and procurement sources for group health plans, it now will affect coverage onset dates. Yet, many organizations consider themselves unprepared to meet reform requirements, as FierceHealthPayer reported. And employers actively are seeking new ways to manage and deliver employee health insurance benefits.

Expecting staff to work a set number of hours before coverage kicks in is generally acceptable under the final rules as long as the requirement is capped at 1,200 hours. The rules also generally allow applying other eligibility conditions. Examples include requiring staff to meet defined sales goals, earn a specified level of commission or successfully pass a probationary or orientation period of employment, according to the announcement.

The final rules will take effect 60 days after their publication in the Federal Register, which is slated for next Monday.

The U.S. Departments of Labor, Treasury and Health and Human Services also are issuing a companion proposed rule capping the maximum length of an otherwise permissible employment orientation period to one month. They will release that proposal for public comment, the announcement said.

For more:
- see the U.S. Department of Labor announcement
- read the final rules (.pdf)

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