Waiting Period Changes

  • How is the 90-day waiting period changing? 

    For plan years beginning on or after January 1, 2014, employees and dependents who are otherwise eligible for coverage under an employer’s group health plan cannot be required to satisfy a waiting period (the time that must pass before coverage can become effective) longer than 90 days, including weekends and holidays. Employers are not obliged to make employees observe any waiting period at all.

    While the law indicates that the probationary period is no longer than 90 days, Premera has made a business decision to implement a waiting period that does not exceed first of the month following 60 days.

    Once the employee obtains coverage under the plan there can be no further exclusions to limit coverage for pre-existing conditions.

    How will we administer this provision? 

    The standard waiting periods Premera will administer and include in contracts will be:

    • Coverage Begins on date of hire
    • Coverage begins on first of the month following 30 days
    • Coverage begins on first of the month following 60 days
    1. Employer may designate different probationary periods for distinct classes of employees as long as each class is specifically defined (by title or position) and all members within the class are treated equally
    2. Premium is charged to the employee when coverage begins
    3. If a change in the probationary period causes a significant change (10% or more) in enrollment, the group must be reviewed by underwriting for rate impact.

    What about certificates of creditable coverage? 

    Effective January 1, 2015, Certificates of Creditable Coverage will no longer need to be provided.

    Note: HIPAA certs do still need to be distributed throughout 2014 as groups who are on plan years may still require certificates of credible coverage for pre-existing conditions.

    Does this rule apply to my group? 

    This rule applies to all grandfathered and non-grandfathered group health plans and health insurance issuers, including multi-employer health plans and single-employer group health plans maintained pursuant to collective bargaining agreements.

    The proposed regulations permit different eligibility conditions based on a participating employer’s industry or an employee’s occupation as long as they are not designed to avoid compliance with the 90-day rule. The preamble to the proposed regulations specifically notes that eligibility provisions based on compensation or buy-ins to satisfy hours of service requirements, and hour banks are permitted under the proposed regulations. The proposed rules clarified that MSPPs will be subject to the Federal External Review process if not subject to a State’s external review process.

    Note: Groups with collectively bargained agreements are NOT exempt from the effective period of the waiting period.

    How does the regulation relate to employer shared responsibility (200+ employers)? 

    The proposed regulations warn that substantive eligibility conditions that are permitted under the 90-day waiting period rule may nonetheless result in a failure by a large employer to offer coverage to a full-time employee and could result in an assessable payment under the employer shared responsibility rules.

    What's the administrative process look like for this waiting period? 

    1. Employers are not obliged to make employees observe any waiting period at all.
    2. The waiting period begins when the employee has met all of the plan’s eligibility conditions such as being in an eligible job classification or working the required number of hours per week. For a designated part-time employee, the cumulative hours of service cannot exceed 1,200 hours and coverage must begin no later than the 61st day after that service requirement is met.
    3. All calendar days are counted, including weekends and holidays. If the 61st day is a weekend or holiday, the group may choose to permit coverage to be effective earlier than the 61st day for administrative convenience. A group may not make the effective date of coverage later than the 61st day.
    4. If eligibility is based on completion of hours, the group cannot require more than 1,200 hours for a full-time employee or exceed 60 days.

    What if an employee is already in a waiting period when the new rules take affect? 

    If an employee is within their current plan’s waiting period after the group renews post January 1, 2014, the 90-day rule takes affect.

    • Example: If the employee has been in a waiting period over 60 days, they are effective for coverage on the renewal date
    • If an employee is within a waiting period which is longer than 60 days and their current wait period has been 30 days, after 30 days they will be eligible for coverage