The changes and delay
s in mandates of the Affordable Care Act have had a dizzying effect on industry professionals and businesses owners alike. Whether you support Healthcare Reform, believe it to be the apocalypse, or fall somewhere in between, frustration at this point is practically built in. With all of the Constitutional challenges, technology failures, implementation snafus, partial delays and leakage of money, there is only one thing that can be assured: This thing will change and change again, and may even do so without notice.
We perform outsourced human resource functions for nearly 100 client companies that vary in size from a few employees to over 1500; therefore, my staff and I have been following ACA developments since early 2010. Furthermore, we have ultimately taken responsibility for consulting clients of all sizes and business models on how best to navigate the regulations to keep their business compliant and protected through the challenges of ever-transforming legislation. The major lesson of the past four years has been not to jump the gun. In the case of health care reform, procrastination pays!
The latest twist relates to waiting periods for health benefits and a significant change to the original mandate limiting waiting periods to 90 days. Many employers implement a 90-day probationary period that doubles as a waiting period for onboarding to company benefits programs. For accounting purposes, a vast majority of my clients have historically favored the first of the month following 90 days as the effective date for health benefits. Under the original verbiage of the ACA, waiting periods would have to be changed to 90 days flat or fewer than 90 days. For ease of deductions and administration, we have been advising our clients to move to the first of the month following 60 days as their effective date.
Of course, such a change requires significant legwork from HR in terms of policy changes, employee communications, updated plan documents and a host of other time-consuming administrative burdens. Like most HR teams, we had begun the painstaking work of implementing this mandated change by informing business owners, editing handbooks, preparing employee communications and otherwise taking care of administrative details when things changed yet again.
On June 23, 2014, the Departments of Treasury, Labor and Health and Human Services released final regulations clarifying the maximum allowed length of any “reasonable and bona fide employment-based orientation period” as 30 days. This 30-day orientation period can now be stacked onto the maximum 90-day waiting period, making the maximum total benefit waiting period to be 120 days.
In other words, first of the month following 90 days still works.
Seems that, particularly in terms of ACA, that old saw about change being the only constant really applies. Ah, well. We’re staying on top of it so you don’t have to.
If you’d like to learn more about what the Affordable Care Act might mean for your business, check out this video explaining what you should know from an information, technology, and overall compliance viewpoint.