HR Fast Facts: Waiting Periods for Health Insurance

A waiting period is the length of time that employees must work at a company before their health insurance coverage is effective.

Employers decide what the waiting period will be, but it cannot exceed 90 days according to the Affordable Care Act.

Waiting periods:

• Begin when an employee officially becomes “benefits-eligible,” so a new hire or an employee moving from part-time to full-time will need to satisfy their waiting period from their first day as a  full-time  employee .
• Can be changed mid year per the carrier’s discretion.
• Cannot be changed for only 1 employee

The available waiting period choices for an admin will depend on carrier restrictions and state laws. Some states do not allow 90-day waiting periods. Here’s an example of what waiting periods can be defined as:

One, Two, or Three, Month(s) from Hire Date

Example: Two months from Hire Date.

• Mortimer Lightwood’s hire date is January 15.
• Two months from January  15th  is March 15.
• Mortimer will be eligible for benefits on March 15.

Hire Date

Example: Hire Date.

• Mortimer  Lightwood’s hire date is January 15.
• Mortimer will be eligible for benefits on January 15.

First of the Month Prior Hire Date

Example: First of the month prior Hire Date.

• Mortimer Lightwood’s  hire date is January 15.
• The first of month prior to his hire date is January 1.
• Mortimer will be retroactively eligible for benefits on January 1.

First of the Month Following Hire Date

Example: First of the month following Hire Date.

• Mortimer Lightwood’s  hire date is January 15.
• Mortimer is eligible for benefits on February 1.

First of the Month Following Hire Date, coinciding

Example: First of the month following Hire Date, coinciding with the current month

• Mortimer Lightwood’s hire date is January 1.
• If the carrier or policy rule indicates that first of the month hires are effective on their hire date (coinciding = true), Mortimer is eligible for benefits on January 1.
• If the carrier or policy rule indicates that first of the month hires are not effective on their hire date (coinciding = false), Mortimer is eligible for benefits on February  1.

First of the Month after 30, 60, or 90 Days

Example: First of the month after 30 days.

• Mortimer  Lightwood’s  hire date is January  15.
• 30  days after January  15th  is February  14.
• The first of the month following February 14 is March 1.
• He will be eligible for benefits on March 1.

There can be different waiting periods for each line of coverage offered, but not for different plans under the same coverage type.

• A company can set a “First of the Month Following Hire Date” waiting period for medical and a  60-day  waiting period for dental and vision, if desired.
• The company cannot set a 30 day waiting period for their medical HMO, a  60 day waiting period for their medical  PPO, and “First of the Month Following Hire Date” for their medical HDHP option.