The final regulation on the 90-day waiting period limitation was released in June of 2014. This regulation applies to all group health plans issued on or after 1/1/2015 - small and large groups, self-funded and fully-insured. The rule states that the maximum allowable waiting period is 90 days and allow for an orientation period of not more than 30 days. Employers who set up an orientation period based on a bona-fide, employment-based reason should ensure they have the practice documented in all job descriptions, employee handbooks, etc.

Implications for Large Employers
Large employers need to be careful if they are interested in including an orientation period in their onboarding process. While a one month orientation period may be in compliance with the 90 day wait rule, it could expose them to penalties under the Employer Shared Responsibility Provision. Below is an excerpt from the regulations:

Compliance with these final regulations is not determinative of compliance with section 4980H of the Code, under which an applicable large employer may be subject to an assessable payment if it fails to offer affordable minimum value coverage to certain newly-hired full-time employees by the first day of the fourth full calendar month of employment. For example, an applicable large employer that has a one-month orientation period may comply with both PHS Act section 2708 and Code section 4980H by offering coverage no later than the first day of the fourth full calendar month of employment. However, an applicable large employer plan may not be able to impose the full one-month orientation period and the full 90-day waiting period without potentially becoming subject to an assessable payment under Code section 4980H.

Implications for the NJ SEH Market
On October 28, 2014, NJ DOBI released a bulletin announcing updated small employer applications to include the option for a group to include an orientation period.

Oxford and AmeriHealth have broker briefs on the topic including new applications.

Some Important Notes:
-This change will apply to all small group carriers. Please make sure you are using the updated applications when submitting new business.
-Any waiting period, which cannot exceed 90 days, will begin on the first day after the conclusion of the orientation period
-The orientation period is determined by adding one calendar month and subtracting one day, measured from the employee's start date.

Example Calculation:
The waiting period will be calculated from the first date of eligibility. If an eligible employee starts on March 4, 2015, the last day of the orientation period would be April 3, 2015. April 4, 2015 marks the start of the 90-day waiting period. The group administrator/broker should use April 4, 2014 as the hire date on the enrollment file for the new employee.

For more information, please contact brokersupport@martinins.com.