What's a Waiting Period for Employer Benefits? Does it Have To Be 90 Days?

What is it?

The waiting period is a block of time your employees have to wait before health coverage kicks in. It streamlines access to benefits by preventing your team from having to wait forever before receiving insurance.

Most insurance companies allow you to set your waiting period anywhere between 0-90 days (90 days is the maximum allowed by law). One of the most common waiting periods (and what we recommend if you’re unsure) is the 1 of the month following 30 days of employment.

 

Why does it matter?

To start, you need to know about the waiting period because, by law, you have to follow it. Whenever a new employee starts, it’s important to tell them the exact date their coverage begins. If insurance is activated after their first day, knowing that simple fact will help them prevent a lapse in coverage for themselves and their families.

Whether it’s feeling more relaxed on that first daunting day or not having to worry about all the splintery details that go into enrolling in benefits, you want people to feel like they’re being taken care of whenever they interact with you.

A warm welcome with clear directions also helps people feel more in control at a time when things are already so new and tumultuous.

 

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Our agency can help create enrollment materials and tools to make sure you’re set up for success.

And finally, you can wield it as a tool. If you have a company that has high turnover, you may consider lengthening the waiting period closer to the 90-day upper limit. But if the opposite situation is true, it may be wise to begin benefits right after your new team member starts.

 

How long should I wait?

90 days is the maximum amount of time you can wait before activating your employee’s health benefits. However, showing your team that you truly care about their well-being means never (ever) waiting until the last minute, so we recommend setting it sooner.

 

Can I have different waiting periods for different groups of employees?

Yes! You can assign different waiting periods to different groups in your company. The only caveat is that you need to make sure each group is treated in the same way and officially established as a non-discriminatory class of employees in your benefits plan. For example, if you have a different waiting period for hourly workers, that would fit the bill.

 

Do the 90 days include work days or calendar days?

Under the law, the 90 days are just that — 90 consecutive calendar days. That means weekends and holidays are swept up in the final count. If the 91st day falls on a non-workday, coverage needs to be switched on before that day or on the exact weekend or holiday the 91st falls on.

We actually don’t recommend a 90 day period for this reason--it’s too close to the 90 day deadline and you run the risk of being noncompliant.

 

Pro tip: 90 days does not equal three months. There are a few other mentions of a three-month waiting period in the ACA, but it’s referring to a completely different thing.

 

What if my employee needs coverage ASAP?

If they don’t have current coverage, refer them to our team of agents who will be able to help them find a plan that meets their needs: 312.726.6565.

 

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