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ACA final rule clears up 90-day waiting & orientation period confusion

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Christian Schappel
by Christian Schappel
July 2, 2014
2 minute read
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The Affordable Care Act’s (ACA) 90-day waiting and separate, but related, orientation period rules are slated to kick in just six months from now. But federal agencies had yet to issue final rules on the orientation periods — until  now. 
Employers looking to gear up for 2015’s ACA requirements had been waiting for confirmation that how they’ve been prepping to comply with the law’s waiting and orientation period rules would be sufficient.
Well, on June 25 the departments of the Treasury, Labor and Health and Human Services published final rules regarding orientation periods — and they mirror previous guidance and rules on the subject, clearing the air once and for all what will be required of employers.

Waiting period + orientation OK

Here’s the breakdown of what you need to know:
What had been clear is that employers — for plan years beginning on or after Jan. 1, 2015 — couldn’t wait more than 90 calendar days to offer health insurance coverage to employees in positions eligible to receive coverage. Whether eligible employees accept that coverage is another matter. But employers would be required to offer coverage within 90 days.
But what hadn’t been clear is how orientation periods meshed with the 90-day limit. The final rules clarify what employers had been lead to believe all along: Making employees pass through a one-month orientation period prior to starting the clock on the 90-day period will not be viewed as an attempt to avoid compliance with the ACA.
The one-month period is determined by adding one calendar month and subtracting one calendar day from an employee’s start date. The 90-day waiting period must then begin on the next calendar day following the orientation period.
As far as what counts as a “day” during both the orientation and 90-day periods, the rules say employers must count all calendar days, not just business days. That means employers must also count weekends and holidays.
According to the feds, the orientation period is designed to: “provide plan sponsors with flexibility to continue the common practice of utilizing a probationary or trial period to determine whether a new employee will be able to handle the duties and challenges of the job, while providing protections against excessive waiting periods for such employees.”

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