Group health plans are prohibited from requiring an otherwise eligible employee, spouse, or dependent to wait more than 90 days before their coverage takes effect. This requirement of the Affordable Care Act (ACA) became effective the first day of the plan year beginning in 2014 and applied immediately to employees who were in a waiting period on that date. All calendar days are counted, including weekends and holidays.

Details

Group health plans and insurers are prohibited from imposing a waiting period exceeding 90 days. “Waiting period” is the time that must pass before coverage for an employee or dependent (who is otherwise eligible to enroll under the plan’s terms) becomes effective. The waiting period begins on the first day that the employee meets the plan’s eligibility definition (e.g., date of hire) and ends on the day before coverage begins. (Delays due to the employee’s special enrollment or late enrollment are not counted toward the waiting period limit.)

For example, John is hired February 1 in a part-time position not eligible for benefits. On June 1, John is promoted to a full-time position eligible for benefits. The maximum waiting period cannot extend longer than 90 calendar days counting from June 1. Therefore, John’s coverage must begin no later than August 30 (assuming that John enrolls for coverage on a timely basis).

For plans that define eligibility based on cumulative service (e.g., employee becomes eligible after completing 1,200 hours of service), the waiting period begins on the day the employee satisfies the cumulative service requirement. The maximum allowable cumulative service requirement is 1,200 hours. Examples of other permissible eligibility requirements include meeting certain sales goals or earning a certain level commission. In these cases, the waiting period begins after the employee completes the eligibility requirement.

Note regarding orientation periods: Employers may require new hires to complete a reasonable and bona fide employment-based orientation period of up to one month. An orientation period is a probationary period during which the employee receives orientation and training. In that case, the waiting period begins upon completion of the orientation period. Note that “one month” is determined by adding one calendar month but subtracting one calendar day. For instance, if the employee’s start date is July 10, the last day of the maximum allowable orientation period is August 9. If the employee’s start date is the first day of the month, the maximum allowable orientation period ends on the last day of the same month.

All calendar days are counted. For administrative convenience, a plan or issuer may choose to permit an earlier effective date than the 91st day if it falls on a weekend day or holiday and when such provisions are included in the plan documents. Coverage must begin no later than the 91st calendar day. Coverage cannot be delayed until the “first of the month” if that would exceed the maximum 90-day waiting period.

For example, ACME Company’s plan is a calendar-year plan and imposes a 30-day orientation period and a 90-day waiting period. Mary is hired September 1 in a benefits-eligible position. Mary’s coverage must begin no later than December 30 (which includes the 30-day orientation period plus the 90-day waiting period)

Official Guidance

Ninety-Day Waiting Period Limitation and Technical Amendments to Certain Health Coverage Requirements under the Affordable Care Act—Final Rule (79 Fed. Reg. 10296, February 24, 2014)

FAQs about Affordable Care Act Implementation (Part XVI) (September 4, 2013)

Ninety-Day Waiting Period Limitation (Orientation Period): Final Rule (79 Fed. Reg. 35942, June 25, 2014)