If you are using Office 365 without federation with your on-premise Active directory you are obligated to change password for your cloud based identity every 90 days.
When using BPOS, this was not a large issue since you had the sign-in client that reminded you to change password in time.
But with Office 365 when you for example only are using SharePoint online, there is not yet a way to get password expiration reminders if the users are accessing SharePoint with the direct url (eg. https://mycompany.sharepoint.com). This means you potentially end up with users that cannot access SharePoint when their password has expired.
Until they’ve come up with a solution for password expiration reminders via email one workaround is to set the users passwords to never expire.
You do this with the Powershell module for Online services (http://onlinehelp.microsoft.com/Office365-enterprises/ff652560.aspx) with the following commands:
$cred = Get-Credentials Connect-MsolService -Credential $cred
For one user:
Set-MsolUser -UserPrincipalName email@example.com -PasswordNeverExpires $True
For all users:
Get-MsolUser | Set-MsolUser -PasswordNeverExpires $True
Note that this works for all Office 365 services that are using Azure Active Directory (Exchange Online, Lync Online and Sharepoint Online)