The ACA’s governing agencies (DOL, HHS IRS) issued final rules on the Orientation Period, a period an employer can use with a new hire prior to the beginning of any waiting period (no longer than 90 days) for health coverage. The orientation period is a time of assessment to determine whether an individual has the requisite qualifications, licensure, or other standards to perform the job. This document provides guidance on those final rules, which mirror those of the proposed rules, and are applicable to both insured and self-funded group health plans for plan years beginning on or after January 1, 2015.

1. Subject: Final Rules Address Orientation Period
Date: June 26, 2014
The Affordable Care Act (ACA) requires all health plans to comply with a waiting period that is
no longer than 90 calendar days, effective for plan years beginning on or after January 1, 2014.
The ACA’s governing agencies (IRS, Labor and HHS) issued final regulations addressing the
90-day waiting period restriction earlier this year, together with a proposed regulation relating to
orientation periods (see CBIZ HRB, Final Rules – 90-Day Waiting Period, 2/24/14).
On June 25, 2014, the agencies published final rules implementing orientation periods. As with
the proposed rule, the final rules permit the imposition of a one-month orientation period prior
to the beginning of a waiting period. The orientation period is a time of assessment to
determine whether an individual has the requisite qualifications, licensure, or other standards to
perform the job.
The one-month orientation period is measured forward from the employee’s date of hire by
adding one calendar month and subtracting one calendar day; after which time, the maximum
90-day waiting period would commence. For example, if an eligible employee’s start date is
May 3rd
, the orientation period would end on June 2nd
. Similarly, if an eligible employee’s start
date is October 1st
, then the last day of the orientation period would be October 31st
.
Applicability date. The final orientation period rules become applicable to both insured and
self-funded group health plans for plan years beginning on or after January 1, 2015. In the
meantime, the proposed regulations, which mirror the final regulations, can be relied upon.
NEXT STEPS
 If an orientation period is to be implemented, make certain the insurance contract, health
plan, reinsurance contract or any other governing document accurately reflect the terms of
the orientation period.
 Make certain the orientation period is used for its intended purpose, i.e., to meet requisite
qualifications, licensure, or other standards to perform the job, and not used as a
subterfuge to delay the waiting period.
 It is important to note that an orientation period followed by a 90-day waiting period could
put an employer at risk for the ACA’s shared responsibility penalty under IRC Section
4980H(a) or (b). As a reminder, employers employing 50 or more employees are subject to
the employer shared responsibility requirement and could be at risk for a penalty if
adequate and affordable coverage is not offered by the first day of the 4th
month following
the date of hire.
June 26, 2014 – HRB 96 Page 1

2. CBIZ Health Reform Bulletin
Example: XYZ Company is subject to the ACA’s employer shared responsibility
requirement. XYZ Company hires Joe as a full-time employee on January 6th
. A one-
month orientation period followed by a 90-day waiting period is imposed, making Joe’s
coverage date May 6th
(give or take a day, depending on leap year status). While this
timeframe satisfies the waiting period requirements, it puts XYZ Company at risk for the
shared responsibility penalty since coverage was not offered by May 1st
(the first day of the
4th
month following the hire date).
About the Author: Karen R. McLeese is Vice President of Employee Benefit Regulatory Affairs for CBIZ
Benefits & Insurance Services, Inc., a division of CBIZ, Inc. She serves as in-house counsel, with
particular emphasis on monitoring and interpreting state and federal employee benefits law. Ms. McLeese
is based in the CBIZ Leawood, Kansas office.
The information contained herein is not intended to be legal, accounting, or other professional advice, nor are these comments
directed to specific situations. The information contained herein is provided as general guidance and may be affected by changes in
law or regulation. The information contained herein is not intended to replace or substitute for accounting or other professional
advice. Attorneys or tax advisors must be consulted for assistance in specific situations. This information is provided as-is, with no
warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to
inform the reader of any changes in laws or other factors that could affect the information contained herein. As required by U.S.
Treasury rules, we inform you that, unless expressly stated otherwise, any U.S. federal tax advice contained herein is not intended or
written to be used, and cannot be used, by any person for the purpose of avoiding any penalties that may be imposed by the Internal
Revenue Service.
June 26, 2014 – HRB 96 Page 2