The Department of Labor’s Employee Benefits Security Administration (EBSA) has issued its 16th set of Frequently Asked Questions (FAQs) on the Affordable Care Act’s (ACA) implementation. The latest guidance addresses questions on the notice of coverage options available through the future health exchanges, and the limits on waiting periods for coverage.
The ACA added a new section to the Fair Labor Standards Act (FLSA) that requires employers to notify employees of their health coverage options through the Exchanges. Earlier this year, the EBSA issued Technical Release 2013-02, which provided temporary guidance on this requirement as well as model notices.
According to the new FAQs, an employer will have fulfilled its notice obligation if another party – such as an issuer, multiemployer plan, or third-party administrator – provides “timely and complete notice.” For an employer to be relieved of its notice obligation in this instance, the third party must provide notice to all employees, regardless of whether an employee is enrolled in, or eligible for, coverage under a group health plan.
With respect to the healthcare reform law’s stipulation that a group health plan or health insurance issuer offering group health insurance coverage cannot apply any waiting period that exceeds 90 days, the new FAQs explain that plans and issuers can still rely on guidance included in the March 21, 2013 proposed rule at least through 2014. If the final regulations wind up being more restrictive on plans or issuers, they will not be effective prior to January 1, 2015.
The FAQs explain that under the proposed rules:
to the extent plans and issuers impose substantive eligibility requirements not based solely on the lapse of time, these eligibility provisions are permitted if they are not designed to avoid compliance with the 90-day waiting period limitation. Therefore, for example, if a multiemployer plan operating pursuant to an arms-length collective bargaining agreement has an eligibility provision that allows employees to become eligible for coverage by working hours of covered employment across multiple contributing employers (which often aggregates hours by calendar quarter and then permits coverage to extend for the next full calendar quarter, regardless of whether an employee has terminated employment), the Departments would consider that provision designed to accommodate a unique operating structure, (and, therefore, not designed to avoid compliance with the 90-day waiting period limitation).
FAQs I-XV can be found here.