July 31, 2013

Nine FAQs about the 90-Day Waiting Period

For plan years beginning on or after Jan. 1, 2014, a group health plan or health insurance issuer offering group health insurance coverage cannot apply any waiting period that exceeds 90 days to individuals seeking to enroll in the health plan. A waiting period is the period that must pass before coverage for an employee (or dependent) who is otherwise eligible to enroll under the terms of the plan can become effective.

This provision of the Affordable Care Act applies to all fully insured and self-insured group health plans — both grandfathered and non-grandfathered. It does not apply to plans in the individual market.

The federal government issued a proposed rule on the 90-day waiting period in March 2013. We have formed a cross-functional workgroup to review and address any operational issues necessary for compliance, but our current interpretation of the rule and our business approach could change based on final rules.

Q1: Many of our current plans have a 90-day waiting period and offer eligibility on the 91st day. Is this still allowed?
A: Our current interpretation of the proposed rule is that the 91st day or the first of the month following 90-day eligibility will no longer be compliant.

Q2: Are there any plans that are excluded from the 90-day waiting period?
A: The provision applies to:

• Grandfathered and non-grandfathered group health plans
• Fully insured plans (large and small)
• All self-insured plans
• ERISA-governed group health plans (both fully insured and self-insured)
• Non-federal government plans (both fully insured and self-insured)
• Church plans (both fully insured and self-insured)
• It does not apply to plans in the individual market.

Q3: Does this need to be applied on Jan. 1, 2014, or at renewal?
A: At renewal. The 90-day waiting period applies to plan years beginning on or after Jan. 1, 2014. If the plan year is Jan. 1, 2014, it would apply on Jan. 1, 2014. If the plan year is June 1, 2014, it applies on June 1, 2014.

Example: An employee is hired March 1, 2014, and the employer has a six-month waiting period with a June 1, 2014, plan year. That employee’s coverage must be available as of the plan renewal on June 1, 2014, because, under the proposed rule, continuing the waiting period would result in a waiting period that exceeds 90 days.

Q4: What if an employee elects coverage late? Do they still have to be insured within 90 days?
A: Under the proposed rule, coverage needs to be made available to otherwise eligible employees and their dependents within 90 days of the employee’s hire date, but there is no penalty to the employer or plan sponsor if an employee or dependent is late in electing coverage, which causes the 90-day period to be exceeded.

Q5: Is the 90-day waiting period measured in calendar days?
A: Yes. The 90-day waiting period is measured from the first day of eligibility, and coverage must be made available no later than the 90th day, even if that day falls in the middle of the month or on a weekend.

Example: An employee is hired March 3, 2014. If the employee’s coverage begins on June 1, 2014, the waiting period would be 91 days. Therefore, coverage would need to be made available as of Saturday, May 31, 2014.

Q6: How does the proposed rule work for employees who are already in a waiting period prior to Jan. 1, 2014?
A: For employees who are already in a waiting period when the proposed rule goes into effect on the employer’s plan renewal Jan. 1, 2014, or after, the days served prior to the renewal date will count toward the 90-day waiting period.

Example: An employee who has elected coverage is hired Sept. 15, 2013, and is in a 90-day waiting period. If the individual’s waiting period has exceeded 90 days upon plan renewal on Jan. 1, 2014, coverage must be made available as of that day.

Q7: Does the new 90-day waiting period limitation have a significant impact on our existing business?
A: We anticipate that this will mostly impact small group accounts.

Q8: What operational changes will Blue Cross and Blue Shield of Texas have to make to comply with the new standards?
A: We have formed an implementation workgroup to review and address any operational issues. We will develop a transition strategy, effective communication, review the need for any new processes or changes to existing processes, and update any related paperwork, as necessary.

Q9: How will BCBSTX communicate the changes to accounts?
A: We are in the process of identifying all affected groups and are developing a communications plan as needed to address the waiting period with producers and employers.