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Agencies Clarify Confusing ā€œTrial Periodā€ Exemption under the Affordable Care Act

On June 20, the agencies implementing the Affordable Care Act (ACA) released aĀ Ā clarifying the effect of orientation periods (also known as ā€œtrial periodsā€) on the ā€œ90-day waiting period ruleā€ under the ACA.Ā  The ā€œ90-day waiting period ruleā€ prohibits group health plans and health insurance issuers from imposing a waiting period of more than 90 days before the beginning of coverage for full-time employees. The New Rule:Ā  Under the terms of the new final rule, the agencies clarify that employers subject to the ACA may require up to a month of ā€œreasonable and bona fideā€ employment orientation before the 90-day count begins for purposes of the 90-day waiting period rule.Ā  This clarification was important because the that was issued by the agencies in February on the topic of 90-day waiting periods (ā€œthe February Ruleā€) did not exactly reach a ā€œfinal conclusionā€ on this issue, which left many health plans and parties to collective bargaining negotiations confused. The February Rule:Ā  While the language of the February Rule permits reasonable and bona fide orientation periods to tack on to the 90-day waiting period, the rule also states that the agencies are simultaneously issuing a proposed rule (issued in the same issue of the Federal Register) that provides that the proposed maximum duration for such orientation periods is ā€œone month.ā€ The February Rule further provides that, while the agencies are soliciting comments on the proposed rule, the agencies will consider compliance with the proposed ruleā€™s one month maximum time period ā€œto constitute a reasonable and bona fide orientation period under [the ACA] at least through the end of 2014.ā€ That language was not very helpful to parties in the middle of negotiating their collecting bargaining agreement expiring in early 2015 or later. The new final rule resolves this issue by adopting the proposed rule without substantive changes and applying the rule to plan years beginning on or after January 1, 2015.Ā Ā  The ā€œone monthā€ period is measured by adding one calendar month and subtracting one calendar day from an employeeā€™s start date in a position that is otherwise eligible for coverage.Ā  The 90-day waiting period must begin on the next day following the orientation period. Editor's note:Ā  This article was written by guest authors and .Ā  Mr. Kuperstein and Mr. McMurdy are both with the law firm of Fox Rothschild LLC in its Labor and Employment/Employee Benefits Group.Ā  For additional information, visit . This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader must consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.