Agencies Release Guidance on Health Reform’s 90-Day Waiting Period Limit

On August 31, 2012, the DOL, IRS, and Department of Health and Human Services released temporary guidance relating to the Patient Protection and Affordable Care Act (“PPACA”) mandate prohibiting group health plans from imposing waiting periods for coverage of more than 90 days in plan years beginning on or after January 1, 2014. The guidance, contained in IRS Notice 2012-59 and DOL Technical Release 2012-02, confirms that other conditions for plan eligibility, such as limiting coverage to full-time employees or to employees working at a particular location, are generally permissible so long as such conditions are not designed to avoid compliance with the 90-day waiting period limitation. The guidance also provides that the use of an initial eligibility measurement period will not be considered an attempt to avoid compliance with the 90-day waiting period limitation, as long as the coverage is effective no more than 13-months after the employee’s start date. Further, cumulative hours of service eligibility requirements are permissible so long as the cumulative number of hours required does not exceed 1,200 hours, and coverage is available no later than the 91st day after the hours requirement is met. This guidance will remain in effect at least through the end of 2014.