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The Departments of Labor, Treasury and Health and Human Services have issued final regulations and other proposed regulations on the 90 day waiting period for employer-sponsored health coverage and measurement periods to determine eligibility of variable hour employees. As most California employers are accustomed to, a more stringent 60 day waiting period maximum is in effect in our sunny state.
Yes, you have heard a bit about this already, and some of you have already made changes to your waiting period in response. However, these are the most recent updates for some areas of the regulation that needed greater clarity and, in some cases, greater leniency.
* If you have ‘variable-hour’ employees, essentially those who are not ‘reasonably’ expected to work an average of 30 or more hours per week or other full-time equivalency, it is extremely important that you begin discussing the rules for tracking those hours for eligibility determination and establish what will become your continued, cyclical measurement periods. Having a standardized, compliant and documented approach to this process will help you to avoid penalties.
* In the most simple of terms, for most fully-insured employers, this has and/or will mean that your group medical waiting period will need to change to 1st of the month following date of hire, 1st of the month following 30 days or even the 60th day following date of hire (Keep in mind that 60th day following date of hire would commonly make an employee’s coverage effective mid-month. It would result in a pro-rated premium as well as pro-rated employer contributions and employee deductions creating obvious complexities.) For those employers that had longer waiting periods, due a to need for longer employee probationary periods or as a result of high employee turn-over, we should discuss the implications for your business and appropriate ways to adjust other practices to compensate.
* Self-insured plans should have more discussion about the management of the waiting period.
For further details review links to the notices below
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