|55 ELM STREET
Telephone: (860) 702-3480
|HEALTH CARE COST
|STATE OF CONNECTICUT
OFFICE OF THE STATE COMPTROLLER
HEALTHCARE POLICY & BENEFIT SERVICES DIVISION
|ATTENTION:||Personnel and Payroll Officers, Chief Administrative and Fiscal Officers, and Business Managers|
|SUBJECT:||Maximum Waiting Periods for Health Benefit Eligibility - Affordable Care Act|
The purpose of this memorandum is to announce revision of the maximum waiting period that can be imposed on new employees for obtaining health benefits. These changes, which take effect on January 1, 2015, are needed to conform to the requirements of the Affordable Care Act.
II. WAITING PERIODS FOR HEALTH BENEFIT ELIGIBILITY
Unless otherwise specified in an applicable collective bargaining agreement or by the terms of employment an employee must work at least one-half (?) the hours per pay period of a full time employee in his or her position (0.5 Full Time Equivalent-FTE) to be eligible to participate in the active health benefit plan. Special rules may apply to employees not in the classified service and for part time professional employees in higher education agencies.
Employees hired to permanent positions (defined as those which require or are expected to require the services of an incumbent for more than six months) are eligible to enroll in active health benefits on the first day of the month following date of hire. Those hired to durational and "temporary" positions become eligible for health benefits after completing six months of continuous service.
The Internal Revenue Service has issued final regulations that establish maximum waiting periods that can be applied to employees in positions that are otherwise eligible for health benefits. Under the new regulations, a health benefit plan cannot apply any waiting period in excess of 90 days. A "waiting period" is defined as any period that must pass before coverage for an individual who is otherwise eligible to enroll can become effective." If an individual is in eligible job classification coverage must be available no later than the 90th day of employment.
For variable hour employees whose health benefit eligibility is conditioned upon working some minimum time and where it cannot be determined whether a newly-hired employee is reasonably expected to fulfill that requirement, the IRS rules provide more flexibility. However, in no event can the initial measurement period for such employees exceed 12 months.
The biggest impact of the IRS rules will occur in agencies where employees are hired to positions that may be designated as "temporary" or "durational" but are expected to last six months or longer. Employees who were previously required to work at least six months before enrolling in health benefits must now be offered coverage to take effect by the 90th day of employment.
Because coverage under our health benefit plan begins on the first day of the month following enrollment, employees in positions that would otherwise be eligible for health benefits after completion of a waiting period under current rules must now be given the opportunity to enroll for such coverage after completing 60 days of continuous employment. This will give these employees sufficient time to enroll so that their coverage is in place before expiration of the 90-day limit.
Employees who become eligible for active health benefits should be enrolled for the Retiree Health Fund deduction beginning with the first pay period of the month in which their health benefits take effect (or they become eligible for such benefits). This is the case even if their job title is denominated as "temporary" or "durational" by the agency.
III. NEED FOR INFORMATION REGARDING CURRENT HEALTHCARE ELIGIBILITY PRACTICES
Beginning in 2015 the Office of the State Comptroller will be reaching out to
agencies to gather information about healthcare eligibility by position and
specification of methods being used to monitor service and eligibility for
variable hour employees. In preparation for monitoring compliance with the
Affordable Care Act?s employer mandate, we will also be soliciting information
from the agencies about health benefit coverage for employees working 30 hours
or more per week.
Questions pertaining to this memorandum may be directed to the Healthcare Policy & Benefit Services Division, Employee Benefits Unit at (860) 702-3486.
Very truly yours,
Thomas C. Woodruff, Ph.D., Director
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