HIPAA waiting period

[Guest kurt johansen]

employer allows part-time employees to begin participating in self-funded health plan immediately but requires them to make contribution to cover their costs. After 12 months of employment, employer picks up the tab. The result is most part-time employees wait until 12 months have elapsed before entering the plan. The employer's new administrator is taking the position that the 12 month period of unsubsidized coverage is a waiting period thus wiping out the preexisiting condition limitation. I think that employees are immediately eligible and therefore, there is no waiting period. Under my interpretation, employees who wait for the subsidized coverage are late enrollees subject to the 18 month preexisting condition clause. Anyone have an opinion on this issue?

Kurt

[KIP KRAUS]

Kurt,

In my opinion, if the plan is offered to part-time employees and they refuse to enroll when eligible I would say they would be subject to any applicable pre-existing medical restriction limitations allowable under HIPAA. The mere fact that part-time employees pay more for their coverage, in my opinion does not exempt them from any of the plan provisions for late enrollment.

If, on the other hand, they do not participate during that first 12 months because they have coverage elsewhere, then we are of course talking about a different HIPAA situation, and I assume that you are not talking about this type of situation.

[Guest Paul]

As a side point, you could have discrimination issues under IRC § 105(h).