News & Updates

← Back to News & Updates

HCR Update: NonDiscrimination Delayed, Waiting Periods

Jan 07, 2011

Health Care Reform Update

January 7, 2010

IRS Delays Enforcement of Nondiscrimination Provision 

Under the Patient Protection and Affordable Care Act (or health care reform law), fully insured group health plans may not have rules/criteria for member eligibility or benefits that have the effect of discriminating in favor of highly compensated employees, for nongrandfathered insured plans. As previously communicated, we are relying on the employer or group to ensure compliance with this requirement. 

The nondiscrimination provision was to be effective for plan years beginning on or after September 23, 2010. However, on December 22, 2010, the IRS issued Notice 2011-1, which delays enforcement of this provision. While previous guidance indicated that the rules for determining compliance for fully insured plans are similar to the rules for self-insured plans, the new notice acknowledges that plans will need more details to comply with this provision adequately.  

The notice states that:

·         The Treasury Department and the IRS, as well as the Departments of Labor and Health and Human Services will not require fully insured plans to comply with the nondiscrimination provisions until after regulations or other administrative guidance of general applicability is issued.

·         When this guidance is issued, it will not be applied retroactively.  

The comment period for this notice continues through March 11, 2011. Therefore, we assume further guidance will be issued no earlier than that date. We'll provide more details to you when the new guidance becomes available.

Comparing Pre-existing and Eligibility Waiting Periods 

The health care reform law includes two provisions that limit the use of waiting periods. One provision applies to pre-existing condition waiting periods. The other applies to employer-defined eligibility waiting periods. To clarify the differences between these provisions, we've developed a flier  that briefly compares them in terms of: 

·         What the waiting period is

·         What the health care reform law requires

·         To whom the requirements apply


Now you have a single, reliable resource for health care reform information.

Privacy Policy