• Full-Time Status and Waiting Periods In 2014
  • February 16, 2012 | Authors: Anthony C. Ciriaco; Jennifer B. Dunsizer; Jolie N. Havens; Linda R. Mendel; Amy M. Stuckey Swank
  • Law Firm: Vorys, Sater, Seymour and Pease LLP - Columbus Office
  • Starting in 2014, large employers (in this context, employers with 50 or more full-time employees) will be penalized for failing to offer group health coverage to all full-time employees.  A full-time employee is one who works, on average, 30 hours per week.  The determination of full-time status will be made on a retrospective basis, by counting hours during a look-back period of no more than 12 months.

    Another requirement going into effect in 2014 is a 90-day maximum on waiting periods to enroll in group health coverage.

    New FAQs in DOL Technical Release 2012-01 describe the Departments’ current thinking on the interplay between the determination of full-time status and the 90-day cap on waiting periods.  Most importantly, an employer will not be subject to penalties for failure to offer group health coverage to an employee during his or her first three months of employment.  In addition, if an employer limits eligibility for its group health plan to full-time employees, the 90-day waiting period will start when an employee enters the eligible class (i.e., full-time employees).  This would mean:

    • If an employee does not work full-time during the first three months of employment, the employer will not be subject to penalties for failing to offer health coverage during the employee’s first six months of employment (and potentially beyond).
    • If an employee works full-time during the first three months of employment and that schedule is reasonably representative of the average hours the employee is expected to work on an annual basis, the employer must treat the employee as full-time at the end of the three-month period and will be subject to penalties if group health coverage is not offered at the end of the three-month period.
    • If an employee works full-time during the first three months of employment but that schedule is not reasonably representative of the average hours the employee is expected to work on an annual basis, the employer can take an additional three-month period to determine whether the employee is or is not full-time.  In such a case, the employer will not be subject to penalties for failing to offer health coverage during the employee’s first six months of employment (and potentially beyond).  This rule may be especially helpful to companies that might hire employees to work more hours during a busy season (or during initial training) and then fewer hours throughout the balance of the year.