Group asks feds to ease new worker health coverage rule

By Jerry Geisel, Crain News Service

WASHINGTON (May 29, 2013) — The American Benefits Council (ABC) is asking federal regulators to ease a rule that will require employers to offer health insurance coverage to newly hired employees no later than 90 days after they begin work starting in 2014.

Currently, a common employer practice is to make coverage effective as of the first day of a month, rather than "in terms of the lapse of a certain number of days," the Washington-based council said in a letter sent last week to the Labor Department.

"By requiring that the waiting period not exceed 90 days, employers that hire new employees midmonth would practically be afforded less than 90 days to make coverage available," according to the ABC letter, which was signed by Paul Dennett, senior vice president of health policy, and Kathryn Wilber, senior counsel of health policy in Washington.

That would result because new employees would have to be offered coverage as of the first day of the third full month after employment, which, the ABC letter said, "could well be in advance of the 90th day following the start of employment."

Congress did not intend—by implementing a 90-day waiting period—that "most health plans would, in practice, be effectively required to enroll participants as soon as two months following the date of hire," the ABC letter said.

Instead, regulators should revise the proposed rule so that the 90-day maximum waiting period could be satisfied if coverage "is effective no later than the first day of the fourth full calendar month following an employee's start date, ABC said.

Regulators have said that "due to the clear text of the" Patient Protection and Affordable Care Act, waiting periods may not extend beyond 90 days, with all days, including weekends and holidays, counted.

Such long waiting periods are relatively rare. A 2012 Kaiser Family Foundation survey found that only 8 percent of newly hired employees are subject to a waiting period of at least four months.

This report appeared in Business Insurance magazine, a Chicago-based sister publication of Tire Business.