The Departments of Labor (DOL), Health and Human Services (HHS) and Treasury on Aug. 31 issued temporary guidance that addresses the 90-day waiting period limitation contained in the Patient Protection and Affordable Care Act (PPACA). In addition, the Treasury Department issued a notice providing administrative guidance for determining which workers qualify as full-time employees for the purpose of the shared responsibility provision.
Under PPACA, employers that have 50 or more full-time employees and fail to offer affordable health coverage to them may be required to make a shared responsibility payment. Previous guidance gave employers the option to use a look-back measurement period of three to 12 month to determine if new, variable-hour/seasonal employees qualify as full-time. The recent temporary guidance expands that safe harbor to allow employers to use the same method for ongoing employees and exempts the employers from the tax penalties during the measurement period. At the end of the look-back period, employers will be required to offer a corresponding stability period during which coverage will be available to the employees that were determined to be full time.
The other set of temporary guidance offers a definition for the 90-day wait period, guidance on how to apply it to variable-hour employees when hours-per-service is a condition of being eligible for the plan and offers examples.
Both forms of guidance will remain in effect until at least the end of 2014.
In addition, comments are requested and should be submitted no later than Sept. 30. Each Department has provided instructions on how to submit comments.
For more information on the 90-day waiting period limitation use the following guidance:
DOL Technical Release No. 2012-02
IRS Notice 2012-59
For more information on determining full-time employees for purposes of shared responsibility, see
IRS Notice 2012-58.