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 19 attorneys engaged exclusively in
planning and employment law. Five 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
7121 Fairway Drive
Palm Beach Gardens, FL 33418
Francisco, CA 94104
September 20, 2012
State and Federal Law
IRS Issues Guidance on PPACA's
90-Day Group Health Plan Waiting Period Limitation
The IRS has issued Notice
2012-59, which offers temporary guidance on the prohibition in the
Patient Protection and Affordable Care Act ("PPACA")
against group health plan waiting periods of more than 90 days. In
particular, the Notice defines the term "waiting period"
and specifies the timeframe during which employers may determine
whether newly-hired, variable hour, or seasonal employees are
eligible for group health plan coverage.
The Notice defines
"waiting period" as the period of time that must pass
before coverage for an employee or dependent becomes effective. While
eligibility conditions based solely on the passage of time are
permissible for no more than 90 days, other eligibility conditions
are generally permissible, unless they are designed to avoid
compliance with the 90-day limitation. The Notice clarifies that if
an employee may elect coverage that would begin within the 90-day
waiting period, no violation will occur simply because the employee
takes more time to elect coverage.
If group health plan
eligibility is conditioned on an employee working full-time (or
regularly working a specified number of hours per period) and it
cannot be determined whether a newly-hired employee will work the
required number of hours, the plan may use a measurement period to
determine if the employee satisfies the plan's eligibility condition.
However, any measurement period must be consistent with the
requirements for determining a newly-hired employee's full-time
status under PPACA's employer mandate. (See the Alert of
9/13/2012.) Also, the measurement period cannot exceed 13 months from
the employee's start date, plus the number of days until the first
day of the next full calendar month.
The 90-day limitation on
waiting periods becomes effective for plan years beginning on or
after January 1, 2014. Unlike PPACA's employer mandate, which applies
only to certain large employers, the 90-day limitation applies to all
employers regardless of size. While the guidance offered in the
Notice may be relied on at least until the end of 2014, employers
should be aware that additional guidance may be issued for later
years. The Notice is accessible at: http://www.irs.gov/pub/irs-drop/n-12-59.pdf.
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