The Wagner Law Group Description
Wagner Law Group, A Professional Corporation, is a nationally
recognized ERISA & employee benefits, estate planning,
employment, labor & human resources practice.
in 1996, The Wagner Law Group has 23 attorneys engaged
exclusively in employee benefits, estate planning and
employment law. Seven of our attorneys are AV rated by
Martindale-Hubbell as having very high to preeminent legal abilities
and ethical standards. The firm is among the largest ERISA boutiques
in the country. Our practice is national in scope, with clients in
more than 40 states and several foreign countries.
Wagner Law Group
Fax: (561) 293-3591
7108 Fairway Drive
Palm Beach Gardens, FL 33418
Francisco, CA 94104
July 3, 2014
State and Federal Law
on Permitted Orientation Periods under PPACA
DOL, HHS and IRS have released final regulations
providing guidance to employers and insurers on the maximum
employment-based orientation period that can be imposed prior to the
commencement of the 90-day waiting period of the Patient Protection
and Affordable Care Act ("PPACA").
For plan years beginning on or after January 1, 2014,
PPACA prohibits group health plans and health insurers from imposing
(as a condition for eligibility for group health coverage) waiting
periods in excess of 90 days. (See the Alert of 2/27/14.) The new
regulations allow employers to require new employees to complete a
reasonable and "bona fide employment-based orientation
period" before becoming eligible for a group health plan if: (i)
the orientation period does not exceed one month, and (ii) the
maximum 90-day waiting period begins on the first day following the
end of the orientation period. However the regulations do not define
the term "employment-based orientation period."
The one-month orientation period can begin on any day of
the calendar month and is calculated by adding one calendar month and
subtracting one calendar day. For example, if an employee's start
date is July 7, the last permitted day of the orientation period is
The final regulations also stipulate that when there is
no corresponding date in the next calendar month, the last permitted
day of the orientation period is the last day of the next calendar
month. Thus, if an employee's start date is January 30, the last
permitted day of the orientation period is February 28 (or February
29 if it is a leap year).
Employers that are subject to PPACA's employer shared
responsibility provisions (i.e., the "employer mandate")
need to determine how the orientation period rule interacts with the
employer mandate. Specifically, the orientation period rule does not
override the 90-day requirement.
Accordingly, an employer subject to the employer mandate
cannot impose both a full one-month orientation period and a 90-day
waiting period without some risk of becoming subject to the employer
mandate penalty. Employers that desire to impose both an orientation
period and waiting period before making group coverage available to
newly hired employees are advised to work with qualified benefits
professionals to structure orientation and wait periods that will
allow them to avoid PPACA's costly employer mandate penalties.
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