Under the ACA, group health plans may not impose waiting periods longer than 90 days. However, this provision raised several questions. Do employers have to offer coverage to part-time employees? Can employers require any conditions at all? In response to these issues, the IRS has issued new proposed regulations. Employers may rely on the new regulations until the end of 2014.
The new regulations have three key parts. First, the employer is in compliance as long as the employee can elect coverage within the 90 day waiting period. The employee does not actually have to elect coverage before that period expires. The second part addresses late and special enrollees. For these enrollees, the period before their enrollment does not count as a waiting period. Finally, employers can impose substantive eligibility conditions. These conditions do not violate the 90-day rule, unless they are designed to avoid compliance with the 90-day rule. So, for example, an employer can require that an employee be in an eligible job classification. Or, the employer could require that an employee achieve a certain licensure requirement.
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