BHCG Monitor: Focus on Health Care Benefits

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BHCG Monitor: Focus on Health Care Benefits - Health Insurance Exchanges


Health Care Reform – Notable News

The latest ACA developments include a further delay for the pay-or-play employer mandate for employers with less than100 employees and additional regulations from the federal government regarding the “excepted benefits” definition (proposed regulations) and the 90-day eligibility waiting period (final regulations).

ACA employer mandate further delayed for some

Under final regulations released in February, employers with fewer than 100 but more than 50 full-time employees will have another year to plan their strategies to meet the employer pay-or-play mandate – until January 1, 2016. Only employers with more than 100 employees will be subject to the employer mandate for 2015, with one important change – they must offer coverage to at least 70 percent (as opposed to the originally stated 95 percent) of their full-time employees (and their dependents).

Said Internal Revenue Service (IRS) Assistant Secretary for Tax Policy Mark J. Mazur, “While about 96% of employers are not subject to the employer responsibility provision, for those employers that are, we will continue to make the compliance process simpler and easier to navigate.” Beginning in 2016, employers with 50 or more full-time employees will be subject to the pay-or-play mandate and offer coverage to at least 95 percent of their employees (and their dependents) to avoid a penalty.

The final regulations also offer additional guidance for determining whether employees are full-time employees and how to count hours of service. Click here to see the IRS final regulations.

“Excepted benefits” definition expanded

“Excepted benefits” are certain limited scope health benefits that are exempt from insurance provisions of the ACA and the Health Insurance, Portability and Accountability Act of 1986 (HIPAA). Proposed regulations issued last December by the Department of Health and Human Services, Labor and Treasury expand the categories that qualify as excepted benefits in three primary areas:

  • Self-insured dental and vision benefits (whether elected or not) would be considered excepted benefits even if employees are not required to pay for them.
  • “Limited wraparound” group coverage would be recognized as an addition to the list of excepted benefits if specific requirements are met. This would mean that employers could, in fact, offer some level of health benefits to employees that choose not to elect an employer’s health plan in order to purchase health coverage on the health insurance marketplace with a premium tax credit.
  • An Employee Assistance Program (EAP) would qualify as an excepted benefit if: the EAP does not provide significant medical care benefits, is not coordinated with other benefits provided under a health plan, and there are no employee contributions required for participation in the EAP.

By expanding the definition of excepted benefits, more low-income individuals may qualify for subsidies in the health insurance marketplace.

Final rules issued on 90-day limit on waiting periods

The ACA prohibits group health plans from imposing a waiting period of more than 90 days after an employee is otherwise eligible to enroll. The final rule, issued last month, requires that employees are offered coverage on or before the 90th day after hire, regardless of the day of the week. The rule also establishes guidelines pertaining to the relationship between a plan’s eligibility criteria and the 90-day waiting period.

The final rule applies to group health plans and group health insurance issuers for plan years beginning on or after January 1, 2015. For 2014, employers are in compliance if they follow the proposed rule (issued March, 2013) and the new final rule.

In general, the rule specifies an employee is eligible to enroll in a health plan if he or she has met the plan’s eligibility conditions which may include such things as job classification, licensure requirements, sales goals or satisfying a “reasonable and bona fide” orientation period. An eligibility requirement that an employee complete a set number of hours is permitted if it does not exceed 1,200 hours.

Works Cited

ACA Updates - Affordable Care Act. (2014, March). Retrieved from The Alliance.

Brian M. Pinheiro, J. C. (2014, February 13). Long-awaited ACA regulations fuel employer work for 2014. Retrieved from Employee Benefit News.

John Barlament, Amy Ciepluch, Alyssa Dowse, Sarah Fowles. (2014, February). Publications. Retrieved from Quarles & Brady.

Klinger, L. (2013, December 30). News & Publications. Retrieved from Leavitt Group.


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BHCG Monitor: Focus on Health Care Benefits - April 2012