Human Resource & Labor News
www.agc.orgAugust 11, 2014 / Issue No. 4-2014
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On the Inside
Federal Contracting
AGC Submits Comments on Proposed Minimum Wage for Federal Contractors
New Executive Order Requires Federal Contractors to Disclose Labor Law Violations, Give Workers Pay Information, and Limit Arbitration
New Executive Order Prohibits Sexual Orientation and Gender Identity Discrimination by Federal and Federally Assisted Contractors
AGC Provides OFCCP with Construction Industry Overview
OFCCP Proposes Rule for New Equal Pay Report
OFCCP Issues FAQs on Employer-Employee Relationships
Wages & Benefits
Affordable Care Act Affordability Percentage Increases for 2015; Draft Employer Reporting Forms Released
Affordable Care Act Questions Answered During AGC Webinar
Agencies Clarify Confusing “Trial Period” Exemption under the Affordable Care Act
Collective Bargaining So Far This Year Yields Average First-Year Increase of 2.2%
HR Education
McCarthy Building Companies to Share Effective Change Management Strategies at AGC HR & Training Conference
Labor Law
Supreme Court Agrees with AGC-Supported Coalition: 2012 Recess Appointments to NLRB Unconstitutional
AGC Tells NLRB to Keep “Joint Employer” Standard As-Is
Agencies Clarify Confusing “Trial Period” Exemption under the Affordable Care Act
 

On June 20, the agencies implementing the Affordable Care Act (ACA) released a final rule clarifying the effect of orientation periods (also known as “trial periods”) on the “90-day waiting period rule” under the ACA. The “90-day waiting period rule” 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: Under the terms of the new final rule, the agencies clarify that employers subject to the ACA may require up to a month of “reasonable and bona fide” employment orientation before the 90-day count begins for purposes of the 90-day waiting period rule. This clarification was important because the earlier final rule that was issued by the agencies in February on the topic of 90-day waiting periods (“the February Rule”) did not exactly reach a “final conclusion” on this issue, which left many health plans and parties to collective bargaining negotiations confused.

The February Rule: 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 “one month.” The February Rule further provides that, while the agencies are soliciting comments on the proposed rule, the agencies will consider compliance with the proposed rule’s one month maximum time period “to constitute a reasonable and bona fide orientation period under [the ACA] at least through the end of 2014.” 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. The “one month” period is measured by adding one calendar month and subtracting one calendar day from an employee’s start date in a position that is otherwise eligible for coverage. The 90-day waiting period must begin on the next day following the orientation period.

Editor’s note: This article was written by guest authors Daniel N. Kuperstein and Keith R. McMurdy. Mr. Kuperstein and Mr. McMurdy are both with the law firm of Fox Rothschild LLC in its Labor and Employment/Employee Benefits Group. For additional information, visit www.foxrothschild.com.

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.


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