With all the focus on ACA it’s good to step back and look at other regulations that may help with benefit designs. Many incorrectly think the ACA health insurance requirements is a one-size fits all model. However the ACA non-discrimination requirements have been delayed, indefinitely, and therefore are not a factor.

ERISA is the determining regulation. And under ERISA employers are generally free to set the eligibility rules for their group sponsored health plans under ERISA, so long as the rules do not unlawfully discriminate against certain employees.

Bona-Fide Employment-Based Classifications may be permitted. Distinctions among group participants in a health plan must be based on bona-fide employment-based classifications consistent with the employer’s usual business practice. Whether an employment-based classification is bona fide is determined on the basis of all the facts and circumstances, including whether the employer uses the classification for purposes independent of qualification for health coverage (for example, determining eligibility for other employee benefits or determining other terms of employment.)


Employee Benefit Advisors provides employee benefits, tax-advantaged healthcare, compliance guidance for ACA and Health & Welfare DOL Audits, and PEO Advisory & Consulting Services.