Model Language to Assist “Long Form” Model Wrap Plan Amendment
This Model Language Addendum is designed to facilitate completion of this Model Amendment, by offering suggested language (for cutting and pasting) appropriate for common situations. Use of this model language is not required and, in some cases, might not be appropriate; in some cases a client’s situation might be sufficiently unique to require customized language for this Amendment.
1.Adding a New Classification of Eligible Employees for a Component Program
1.1Adding eligibility for all“full-time employees” (as defined in the PPACA) not already otherwise eligible.[1]
Employee Eligibility Classification:
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In addition, any Employee not otherwise described as an Eligible Employee with respect to this Component Program, to the extent the Employee is considered a “full-time employee” of the Employer, as determined by the Employer, pursuant to Internal Revenue Code §4980H and guidance issued thereunder. In making this determination of “full-time employee,” the Employer shall apply the terms of its Policy Document for Full-Time Employee Determinations Under the PPACA (“PPACA Policy”).
1.2Adding eligibility for only certain PPACA-defined full-time employees not already otherwise[2] eligible.
Employee Eligibility Classification:
…
In addition, the following Employees not otherwise describedas an Eligible Employee with respect to this Component Program, to the extent the Employee is considered a “full-time employee” of the Employer, as determined by the Employer, pursuant to Internal Revenue Code §4980H and guidance issued thereunder:[Describe the additional classifications of Employees the Employer will treat as eligible, to the extent the Employees are considered “full-time employees” under the PPACA]:
In making this determination of “full-time employee,” the Employer shall apply the terms of its Policy Document for Full-Time Employee Determinations Under the PPACA (“PPACA Policy”).
2.Adding or Modifying a Coverage Effective Date (Waiting Period) - Employees
NOTE: You might have a situation that requires you to describe different coverage effective dates/waiting periods for different categories of Eligible Employees, under the same Component Program such as a major medical plan. In that case you will want to separately describe these categories, and for each category provide separate coverage effective date rules.
You might find that you need to use two or more of the following sample paragraphs to describe coverage effective dates/waiting periods under the same Component Program.
2.1First of the month; choose whether to apply one-month orientation period
The first day of the month following (i) [insert number up to 60] days after [choose one][date of hire][ completion of a one-month orientation period beginning on date of hire], or (ii) if later, the date the Employee enter an eligible classification for reasons other than the mere passage of time, provided in either case that the Employee is then still in an eligible classification and has timely enrolled for coverage.
2.2After x days following date of hire; choose whether to apply a one-month orientation period
[Insert number up to 90] days after [choose one][date of hire][completion of a one-month orientation period beginning on date of hire] or, if later, the first day of the month after the date the Employee enter an eligible classification for reasons other than the mere passage of time, provided in either case that the Employee is then still in an eligible classification and has timely enrolled for coverage.
2.3After averaging at least x hours of service per week over a measurement period (new variable hour Eligible Employees only)
[Option 1: Eligibility of variable hour and part-time employees is tied to full-time status under the PPACA]First day of an initial or standard stability period for which the variable hour employee is considered a full-time employee pursuant to the Employer’s PPACA Policy, provided the Employee timely enrolls for coverage. The terms “variable hour employee,” “stability period” and “full-time employee” shall have the meanings as defined in the PPACA Policy.
[Option 2: Eligibility of variable hour employee is tied to averaging a given number of hours of service or a specific period, but not necessarily 30 hours per week/130 hours per month]First day of the month following a permissible administrative period following a measurement period of up to 12 months, both of which the Employer may prescribe, over which the Employee averaged at least hours of service per [week][ month].
2.4After x cumulative hours of service; choose first of a month thereafter, or x days thereafter
[choose one][First day of the month][[insert number up to 90] days] after accumulating[insert number up to 1,200] hours of service or, if later, after the date the Employee enter an eligible classification, provided in either case that the Employee is then still in an eligible classification and has timely enrolled for coverage.
2.5After satisfaction of a substantive condition such as a certification, licensing, etc.; choose first of a month thereafter, or x days thereafter
[choose one][First day of the month][[insert number up to 90] days] after satisfying the following criterion: or, if later, after the date the Employee enter an eligible classification, provided in either case that the Employee is then still in an eligible classification and has timely enrolled for coverage.
3.Adding or Modifying a Coverage Effective Date (Waiting Period) – Dependents
Later of the date the Eligible Employee becomes covered, the date the Dependent becomes an eligible Dependent, or the date (prescribed by the Employer or the applicable Component Document) following the timely enrollment of the Dependent.
4.Adding or Modifying Coverage Termination Date – Employees
Note: Coverage termination dates may differ for different classes of employees. Recall, however, that under the Employer Mandate every “ongoing employee’s” hours of service are measured over a standard measurement period (unless the employer is using the monthly measurement method, which will be very rare).
As a result, even regular, full-time employees’ hours will be measured over a standard measurement period, and will be treated as “full-time” for purposes of the employer mandate through the stability period following each measurement period during which the employee averaged at least 30 hours of service per week.
Where a full-time employee changes classification to part-time (or begins working part-time hours) during a stability period for which he or she is treated as “full-time” under the PPACA, the employer may want to continue eligibility through the end of the stability period. The following model language is designed to accomplish this. This language, if appropriate, is placed in the Eligibility Appendix/Matrix of the wrap plan, under the “Coverage Termination Date” heading under the appropriate Component Program:
As of the earlier of (a) the end of the last stability period with respect to which such Eligible Employee is considered a full-time employee, and (b) loss of eligibility due to termination of employment, failure to timely pay premiums, or other reasons unrelated to the employee’s classification, under the generally applicable terms of the Plan or Component Program.Coverage of an eligible Dependent terminates on the earlier of the date coverage terminates for the Eligible Employee and the date Dependent ceases to be an eligible Dependent under the generally applicable terms of the Plan or Component Program.
The terms “stability period” and “full-time employee”shall have the meanings as defined in the PPACA Policy.
[1] This language is intended as an additional paragraph under a Component Program’s “Employee Eligibility Classification” heading, and may be appropriate where the Employer intends to treat, as Eligible Employees under a Component Program such as medical coverage, allother Employees not already described in an eligible classification who qualify as “full-time” under the PPACA’s employer mandate rules. The purpose of this language is to make newly eligible for a Component Program allthose employee not previously eligible, if the employees meet the employer mandate definition of “full-time.”
[2] This language is intended as an additional paragraph under a Component Program’s “Employee Eligibility Classification” heading, and may be appropriate where the Employer intends to treat, as Eligible Employees under a Component Program such as medical coverage, some but not all other Employees not already described in an eligible classification who qualify as “full-time” under the PPACA’s employer mandate rules. The purpose of this language is to make newly eligible some—such as employees in a given division, subsidiary or classification—but not necessarily all, those employee not previously eligible, if the employees meet the employer mandate definition of “full-time.”