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Monday, November 7, 2016

ACA Explained: Waiting Periods

Affordable Care Act - Waiting Periods

When the Affordable Care Act was passed, it stated that full-time employees must be offered health insurance coverage that meets minimum essential coverage and value no later than the ninetieth (90th) calendar day after the employee meets the plan eligibility requirements.

This 90-day period is known by the ACA as a waiting period. And since the ACA falls under the section of the Employee Retirement Income Security Act (ERISA), if your waiting period does not meet ACA requirements, your employee(s) can sue you for being in violation of the statute.

And to keep you from having to hire a lawyer to interpret the jargon in the ACA, here are those waiting period requirements, in layman's terms:
  • - Your plan can state that employees are eligible for coverage only after 1,200 cumulative hours of service, at which point your 90-day waiting period can be applied.
  • - Your plan can also state that your employees must work a minimum number of hours during the 90-day waiting period. You can also limit coverage to specific job classifications or require licensure.
  • - If your plan has an hours-based eligibility requirement, but the plan cannot determine whether an employee meets this hours requirement, that employee can be considered a variable hour employee and you can use specific voluntary safe harbors to determine if they’re eligible for coverage. 
  • - Your plan can apply different rules for different groups of employees, i.e.:
    • - Collectively bargained and non-bargained
    • - Salaried versus hourly
    • - Those employed in different locations/states

Did you know that ACAwise can help you keep track of your employees in waiting periods and alert you when it’s time to make them offers of coverage? Cause it can! That, plus create and e-file your 1094 and 1095 forms that are required to be filed with the IRS in the next few months. Sign up today for a free demo or create an account to get started entering in your employee and health coverage info for 2017!

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