The Affordable Care Act (“ACA”) generally limits the maximum length of employer-sponsored group health plans’ waiting periods to no more than 90-days in 2014.  In the March 21, 2013 Federal Register, the U.S. Department of Labor, Health and Human Services , and the Internal Revenue Service jointly released proposed regulations to provide guidance to employers on how to implement this 90-day waiting period limitation.

Beginning for plan years beginning on or after January 1, 2014, a waiting period that provides that coverage is to start on the first day of the month following 90 days of service with the employer will be prohibited.  This is an important development, as employer-sponsored group health plans today commonly utilize such “first day of the month following 90 days of service” waiting period language, and plan amendments will be necessary.

Separately, the proposed regulations also provide guidance to employers on the complicated situations involving newly-hired employees whose work schedules are initially not well defined.  If a health plan conditions eligibility on an employee regularly having worked a certain number of hours of service per period, and it cannot be determined at the time of hiring whether a new employee is reasonably expected to regularly work that number of hours per period, the plan may allow for a reasonable period of time, referred to as a “measurement period”, to determine whether the new employee actually meets the minimum hour requirements.  These proposed waiting period regulations, coupled with the recently-released proposed regulations on employer shared responsibility duties, describe how employers are to administer such measurement periods for variable hour employees.