Affordable Care Act Waiting Period Complications: California 60 Days vs. Federal 90 Days

The federal Affordable Care Act states that the “waiting period” for benefits cannot be more than 90 days from the time a full time employee “otherwise becomes eligible” for benefits.

There is considerable confusion as to when someone may “otherwise become eligible” for benefits. The US Department of Labor issued guidance on this rule, explaining that the 90-day “waiting period” might not begin until an employee reached a certain job classification, or earned a certain amount of commissions, or went through some other “tunnel” to the “waiting period” of 90 days.

Now there’s a new twist in California: AB 1083 goes into effect January 1, 2014—and it says that in California the “waiting period” can be no longer than 60 days.

And just to make it a bit more complicated, the California law is ambiguous as to whether the 60-day waiting period only applies to “small” employers (less than 50 full time equivalents), which do not have to provide health care benefits to employees anyway, or whether it applies to all employers, including “large” employers (more than 50 full time equivalents). So far, California has offered no clarification on this issue.

So what to do if you are a Union bargaining with an employer, or an employer trying to find your way through this maze? The best we can suggest is that you either take the safe route and limit “waiting periods” to 60 days, or contact legal counsel for further exploration.

By Bill Sokol | August 5, 2013

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