A waiting period is the period of time that must pass before health coverage for an employee or dependent can become effective in a group health insurance.
Since 2014, employers offering group health plans may not wait longer than 90 days to begin covering all employees eligible for benefits. Before group health plans could have waiting period of 90 and 120 days.
But the Affordable Care Act changed this and the longest waiting period allowed is 90 days. Calendar days are counted in determining the 90-day period, including weekends and holidays. Plans may choose to permit coverage earlier than the 91st day for easier administration around events such as weekends, holidays or payroll periods.
However, a requirement that coverage will become effective the first day of the following month or payroll period would not be permitted if the waiting period is 90 days.
A shorter waiting period can be implemented, such 60 days, 30 days or even 0 days. In that case, coverage can begin on the first day of the month after the 60 or 30 day waiting period is met. These alternatives would make your admin tasks easier. There’s no need to count days to enroll, or figure out how many days employees had on his or her first month.
In certain circumstances, health coverage can begin after more than 90 days without penalty to the employer. For example, an employer can choose to offer group health insurance only after employees enter certain job classifications, acquire certain licenses, or work a minimum number of hours, up to a maximum of 1,200. In these cases, the 90-day waiting period can begin once these requirements are met.
If you are an employer and wish to change your company health plan waiting period, you can request the change at your renewal time. Contact us to find out how to do implement these changes. We’ll be happy to help!