4
part time, and full-time versus part-time status is a bona fide employment-based condition that is
not considered to be designed to avoid compliance with the 90-day waiting period limitation.
Example 3
. (i) Facts. Under Employer Y’s group health plan, only employees who work
full time (defined under the plan as regularly working 30 hours per week) are eligible for
coverage. Employee C begins work for Employer Y on November 26 of Year 1. C’s hours are
reasonably expected to vary, with an opportunity to work between 20 and 45 hours per week,
depending on shift availability and C’s availability. Therefore, it cannot be determined at C’s
start date that C is reasonably expected to work full time. Under the terms of the plan, variable-
hour employees, such as C, are eligible to enroll in the plan if they are determined to be full time
after a measurement period of 12 months. Coverage is made effective no later than the first day
of the first calendar month after the applicable enrollment forms are received. C’s 12-month
measurement period ends November 25 of Year 2. C is determined to be full time and is notified
of C’s plan eligibility. If C then elects coverage, C’s first day of coverage will be January 1 of
Year 3.
(ii) Conclusion. In this Example 3, the measurement period is not considered to be
designed to avoid compliance with the 90-day waiting period limitation (and is, therefore,
permissible) because the plan may use a reasonable period of time to determine whether a
variable-hour employee is full time under PHS Act section 2708 if the period of time is
consistent with the timeframe permitted for such determinations under Code section 4980H. In
such circumstances, the time period for determining whether an employee is full time will not be
considered to avoid the 90-day waiting period limitation if coverage can become effective no
later than 13 months from C’s start date, plus the time remaining until the first day of the next
calendar month.
Example 4. (i) Facts. Employee D begins working 25 hours per week for Employer Z on
January 3 and is considered a part-time employee for purposes of Z’s group health plans. Z
sponsors a group health plan that provides coverage to part-time employees after they have
completed a cumulative 1,200 hours of service. D satisfies the plan’s cumulative hours of
service condition on December 15.
(ii) Conclusion. In this Example 4, the cumulative hours of service condition with respect
to part-time employees is not considered to be designed to avoid compliance with the 90-day
waiting period limitation. Accordingly, coverage for D under the plan must begin no later than
the 91
st
day after D works 1,200 hours. (If the plan’s cumulative hours of service requirement
were more than 1,200 hours, the Departments would consider the requirement to be designed to
avoid compliance with the 90-day waiting period limitation.)
V. R
ELIANCE
Employers, plans and issuers may rely on the compliance guidance in this notice at least through
the end of 2014. An employee or related individual is not eligible for minimum essential
coverage under the plan (and therefore may be eligible for a premium tax credit or cost-sharing
reduction) during any period when coverage is not offered, including any measurement period or
administrative period prior to when coverage takes effect. Thus, all employees, whether full-