Notice to Employers: Time to Update and Revise Employee Handbooks
Earlier this year, the agencies implementing the Affordable Care Act published a final rule that prohibits health plans and health insurers from applying any waiting period that exceeds 90 days (i.e., the waiting period that must pass before an individual is eligible to receive benefits under a health plan). In California the law states that waiting periods cannot exceed 60 days.
Although 60-day waiting period rule took effect for plan years beginning on or after January 1, 2014, many employers have yet to update their employee handbooks in order to coordinate their provisions with the rule and/or with plan document language that incorporates the rule.
If an employer has not yet renewed their health plan in 2014 they still have the same waiting period. On anniversary date however many insurers are automatically “mapping” groups to a new compliant wait period.
If the employee handbook does not reflect the new wait period it may result in confused employees who are unsure about how long their wait periods are and actual disputes (and lawsuits) between these different entities.
To avoid confusion and potential lawsuits it is important for employers to update and/or revise employee handbooks after their 2014 renewal date.