It’s largely up to employers to determine how optional benefits will function and when they begin.
If you’re not using employee benefits software, then you know how difficult it can be to navigate the regulations around offering great medical, dental, vision, and commuter benefits.
Certain required benefits, like social security and workers’ compensation, go into effect on an employee’s first day of work. On the other hand, optional benefits, like health plans, can be largely within your control. Some businesses offer benefits to new employees immediately, others after 90 days. Setting up an initial waiting period before new employees’ benefits begin can allow time to ensure that a given employee is a good fit for the company, and will likely be sticking around for the longer term.
Rules and Regulations
Because employers are not legally obligated to provide health benefits, for instance, it’s largely up to you to determine how optional benefits will function and when they begin.
There is, however, one exception. As of February 20, 2014, a joint rule by the Departments of Labor, Treasury, and Health and Human Services implemented a provision to the Affordable Care Act (ACA) that prohibits self-insured and insured group health plans from requiring employees to wait more than 90 days before their health plan begins.
It’s important to note that the maximum waiting time is 90 calendar days (not 3 months) and the plan must be fully available to the employee starting on that day, regardless of weekends or holidays.
Though the fixed waiting period can’t surpass 90 days, employers are not prohibited from implementing other non-time based requirements. For example, employees could be required to obtain certain licensure, reach a certain promotion, or complete an orientation procedure before they’re eligible for health care benefits to begin.
As an employer, you can decide how long new employees must wait before their optional benefits kick in, with the exception of health care plans, which have a maximum time-based waiting period of 90 days.