Limits on Waiting Periods
The waiting – or probationary – period is the period of time set by an employer before coverage becomes effective for a new employee enrolling into the group's health benefit coverage.
Group health plans and health insurance carriers that offer group coverage may not apply a probationary period that exceeds 90 days.
The probationary period provision applies to grandfathered and nongrandfathered plans, and to fully insured and self-insured/ASO groups.
The probationary period is the period of time set by an employer before coverage becomes effective for a new employee enrolling into the group's health benefit coverage.
Under the ACA provision, the maximum probationary period is 90 days for group health plans and health insurance carriers that offer group coverage.
Because Small Business Group members may only be enrolled on the first of the given month, the longest probationary period a Small Business Group employer may impose is the First of the Month Following (FOMF) 60 days.
The federal ACA provision applies to:
- Grandfathered and nongrandfathered plans.
- Fully insured and self-insured/ASO groups.
- Groups with collective bargaining agreements (CBAs).
It does not apply to student health plans since, under the ACA, student health plans are treated like individual plans.
No. The probationary period for COBRA participants, retirees and early retirees may be different than the probationary period for active employees. COBRA participants, retirees and early retirees typically would have no probationary period, whereas one may be imposed for all other classes of employees.
Yes. Groups that manage their own probationary period are expected to adhere to applicable federal regulations.
Groups that have a probationary period that falls outside the new limits must change their probationary period.
Yes. There are no federal rules that prohibit an employer from waiving the probationary period if an employee is reinstated/rehired.
Yes. As long as the intent of the requirement is not to circumvent the probationary period regulations, groups may continue to require employees meet a threshold before the probationary period begins.