"Getting to know a worker can extend the PPACA employer mandate coverage-free period to 90 days plus a month."
You recruit, interview and hire carefully -- but that doesn't always mean an employee is going to be a fit.
The Obama administration recognized that fact by approving a one month orientation period to be added to the current ACA 90-day waiting period allowed before being required to provide new employees with compliant healthcare benefits.
The Internal Revenue Service (IRS), the Employee
Benefits Security Administration (EBSA) and the
U.S. Department of Health and Human Services
(HHS) approved an additional one month orientation in their recently published regulations, Ninety-Day Waiting Period Limitation (CMS-9952-F2) (RIN 0938-AR77), in the Federal Register.
The new regulations implement part of the "employer shared responsibility" provisions created by the Patient Protection and Affordable Care Act (PPACA).
In the new final regulations, the agencies say that they want to be able to let employers add a "reasonable and bona fide employment-based orientation period" to the 90-day waiting period without letting an employer use an orientation period as an excuse to put off providing healthcare coverage.
The assumption by the agencies is that a typical bona fide orientation period will last one month -- 28 to 31 days.
"...let employers add a "reasonable and bona fide employment-based orientation period" to the 90-day waiting period without letting an employer use an orientation period as an excuse to put off providing healthcare coverage."
In some cases a longer period orientation may apply -- if, for example, an employee requires more than one month to qualify to become an active employee -- an employer could exclude the employee in orientation from the active-employee count for the time required. "A plan may impose substantive eligibility criteria, such as requiring the worker to fit within an eligible job classification or to achieve job-related licensure requirements," officials say. But the plan "may not impose conditions that are mere subterfuges for the passage of time," according to officials.
Section 4980H of the Internal Revenue Code (IRC) now calls for most large and midsize employers to offer "minimum essential coverage" (MEC) to employees. If employers do not offer MEC, and employees end up qualifying for Medicaid or for PPACA public exchange plan subsidies through the new PPACA public exchange system, the
employers face penalties.
An employer can keep a new employee out of the employer coverage mandate calculations during a 90-day waiting period plus the recently approved one month orientation period, for a total of 120 days.
The Obama administration expects to start applying the mandate provision to employers with 100 or more employees Jan. 1, 2015. If the government adheres to that schedule, employers with 51 to 99 employees may be able to wait until Jan. 1, 2016 to comply if they agree to abide by transition relief program rules. But midsize employers that want to cut back on health benefits might have to start complying with the mandate in 2015.
Source: Bell, Allison 6/30/2014 Feds: 'Orientation' buys an employer PPACA mandate time | LifeHealthPro
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