ACA Guidance on 90-Day Waiting Periods and Certificates of Creditable Coverage

The International Foundation of Employee Benefits reports (4/12/13):

Recently issued Affordable Care Act guidance clarifies the prohibition on waiting periods in excess of 90 days and eliminates the requirement to issue the HIPAA group health plan certificates of creditable coverage after December 31,2014.

Counting 90 days….

Under the proposed regulations, that waiting period may not extend beyond 90 days after an individual has satisfied all other plan eligibility requirements.  All calendar days are counted, including weekends and holidays.  If the 91st day is a weekend or holiday, the plan or insurance issuer may choose to permit coverage to be effective earlier than the 91st day for administrative convenience; however, a plan or insurance issuer may not make the effective date of coverage later than the 91st day.  The proposed regulations clarify that it is not permissible under the 90-day rule to delay coverage until the first day of the month following completion of a 90-day waiting period.  Employers that wish to use a first day of the month of first day of the payroll period as their enrollment date would need to apply a shorter waiting period to ensure that coverage would become effective on or before the 91st day.  The Departments also noted that plans and insurance issuers may not use “three months” as a substitute for 90 days.  If an individual is already in a waiting period for coverage before the first day of the plan year stating on or after January 1, 2014, the waiting period applicable to the individual as of the 2014 plan year cannot exceed 90 days.  The proposed regulations provide several examples to illustrate the 90-day rule.


Elimination of Requirement to Provide HIPAA Certificates of Creditable Coverage


Under current law with respect to adult participants, a group health plan may exclude coverage for preexisting conditions for up to 12 months (or up to 18 months for late enrollees).  This period of limitation is required to be reduced by one day for every day of creditable coverage that the individual has as of his or her enrollment date.   Individuals who lose health plan coverage must be provided with a certificate of creditable coverage as proof of other coverage that could offset the permitted limitation period.  Effective for plan years starting on or after January 1, 2014, preexisting condition exclusions are prohibited for all grandfathered and non-granfathered group health plans and health insurance issuers.  (The prohibition on preexisting condition exclusions is already in effect with respect to individuals under 19 years of age.) This prohibition on preexisting condition exclusions makes the current rules requiring plans to provide certificates of creditable coverage unnecessary.



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