Not a Member? Get access to HR news and resources that you can trust.
Change can be scary, but deploying new HR software doesn't have to be.
Is your employee handbook ready for the New Year? With SHRM’s Employee Handbook Builder get peace of mind that your handbook is up-to-date.
Get the HR education you need without travel expenses or time out of the office.
We don’t just visit a city, we take it over. Join the HR community in NOLA -- June 18-21, 2017.
The Society for Human Resource Management (SHRM) has submitted comments about proposed regulations that would incorporate into the Patient Protection and Affordable Care Act (PPACA) section 2708 of the Public Health Service Act, which prohibits
health plans from imposing any waiting period for coverage that exceeds 90 days. SHRM submitted the comments on May 20, 2013, to the federal agencies that oversee the PPACA.
“The vast majority of [SHRM] members work within organizations that currently offer coverage to employees starting with the first day of the month following 90 days of employment (or the first day of the third month), or the first payroll period following some waiting period. Thus, many small and medium employer plans would be out of compliance with the approach taken in the proposed regulations that would limit waiting periods to no more than 90
calendar days,” wrote Michael P. Aitken, SHRM’s vice president for government affairs.
“Existing practice reflects a reasonable approach taking into consideration HR and payroll systems, insurance company requirements, and the need for consistent employee communications and a controlled process,” Aitken continued. “Most small and medium-size employers simply do not have the staff nor resources to undertake the changes to processes, systems, communications, and other functions that would be needed to switch from current practice to a strict 90 calendar day waiting period at the same time as significant other changes must be implemented to comply with different [PPACA] provisions taking effect in 2014.”
A three-month waiting period also helps prevent adverse selection, where an individual accepts a position solely to obtain health insurance to cover a medical condition, which could impose unfair risk on an employer, Aitken noted. “From an administrative perspective, this eligibility approach allows for a single entry date each month that conforms to insurance carrier requirements, and facilitates efficient payment of premiums and collection of employee contributions. We are concerned that disrupting current practices could actually result in more harm to newly eligible employees as implementation is almost always accompanied by ‘glitches.’ ”
Transition Period Sought
SHRM is recommending a transition period or enforcement safe harbor for the first plan year in which the new rule takes effect. “With the many changes facing employers in 2014, transition relief for section 2708 is appropriate and needed,” Aitken wrote. “We do not believe that Congress intended, in adopting section 2708, to disrupt current practice or to require employers to extend coverage to probationary employees.”
He added, “Granting some leniency to the first of the month following 90 days after an employee has met eligibility requirements makes sense.”
is an online editor/manager for SHRM.
Proposed Rule on 90-Day Waiting Period Limit,
SHRM Online Benefits, March 2013
SHRM Calls for Flexibility in Applying Employer Mandate,
SHRM Online Benefits, March 2013
SHRM Online Health Care Reform Resource Page
Keep up with the latest news. Sign up for SHRM’s free
Compensation & Benefits e-newsletter
You have successfully saved this page as a bookmark.
Please confirm that you want to proceed with deleting bookmark.
You have successfully removed bookmark.
Please log in as a SHRM member before saving bookmarks.
Your session has expired. Please log in again before saving bookmarks.
Please purchase a SHRM membership before saving bookmarks.
An error has occurred
Recommended for you
Become a SHRM Member
SHRM’s HR Vendor Directory contains over 3,200 companies