Employee Handbooks – Health Care Reform may require revisions

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Along with many changes to health insurance plans, several changes will be taking place in regard to compliance when offering coverage to employees.

 

Most of the time our employee handbooks are created, distributed and stored away. The changes listed below may require you to dust them off and take a look at revising a few sections.

 

WHO IS A FULL-TIME EMPLOYEE?

A full-time employee is an employee who was employed on average at least 30 hours of service per week. The proposed regulations treat 130 hours of service in a calendar month as the monthly equivalent of 30 hours per service per week.

 

To determine an employee’s hours of service, an employer must count:

 

  • Each hour for which the employee is paid, or entitled to payment, for the performance of duties for the employer; and

 

  • Each hour for which an employee is paid, or entitled to payment, by the employer on account of a period of time during which no duties are performed due to vacation, holiday, illness, incapacity (including disability), layoff, jury duty, military leave or leave of absence.

 

Under the proposed regulations, all period of paid leave must be taken into account; there is no limit on the hours of service that must be credited.

 

Also, all hours of service performed for entities treated as a single employer under the Code’s controlled group and affiliated service group rules must be taken into account.

 

Offering Coverage to New Hires – Excessive Waiting Periods

Effective for plan years beginning on or after Jan. 1, 2014, a health plan may not impose a waiting period that exceeds 90 days. A waiting period is the period of time that must pass before coverage for an employee or dependent who is otherwise eligible to enroll in the plan becomes effective. Other conditions for eligibility are permissible, as long as they are not designed to avoid compliance with the 90-day waiting period limit.

 

  • If your plan has a waiting period for coverage, confirm that the waiting period is 90 days or less for the 2014 plan year and beyond.

 

Many employers have a “1st of the month following 90 days” definition. These will unfortunately be out of compliance upon your renewal date in 2014 because the law states that coverage must be offered to begin the day after 90 days of employment. We are recommending to our clients that they adopt the “1st of the month following 60 days” definition to avoid headaches in administration associated with having coverage beginning on odd dates within the month.

 

We’re here to keep you informed as the world of employee benefits change. If you would like to schedule a time to meet with a expert in the field of Health Care Reform call or email us today.

 
Ph: (502) 451-4560

info@thebenefitsfirm.com

620 S. 3rd Street, Suite 102 Louisville, KY 40202