What is the maximum new hire employee probationary period  for Health Insurance?

blue shield simplified chart for 1.2015
bs.waiting.period orientation

Federal Register – Bona fide Orientation PeriodFederal Regiser - Bonified Orientation Period

California  now follows the Federal Law Health Care Reform §2708 and allows a

MAXIMUM 90 DAYS waiting period for new employees

to be enrolled on Group Health Coverage  8.15.2014  SB 1034  Health & Safety Code 1357.51 (c)   

Click here to view a simplified chart of your options that comply with the law.  Generally, 1st of the month after date of hire, 1st of month after 30 days, 60 days.

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The interpretations and implementation can be quite confusing.

There are also  Orientation periods Federal Register in addition to waiting periods and probation.   All carriers,  unless you have the question on the employer app,  which Anthem does not will consider the hire date the permanent hire date unless they can prove with an employee manual that they have a 30 days admin period and the person was hired for the 30 days orientation period on 9/12 etc.  If employer does not ask about orientation period it is stated that whatever hire date the employer put on the employee app is the permanent hire date.

Most Insurance companies only start coverage on the 1st of the month, thus 90 days probation may not actually work and be in-compliance with the law, thus the waiting period has to be shorter.  Be sure to read the most recent rulings & graphs from YOUR Insurance Company!

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Background…

There has been a lot of confusion regarding waiting periods due to the difference between the federal Affordable Care Act (ACA) requirement of 90 days and the California state requirement of 60 days (AB 1083).  Recently the Department of Managed Healthcare (DMHC) notified health plans regarding their  regulatory position on this issue.  The DMHC indicated (their website)  AB 1083 addresses the maximum waiting period permitted for California health plans.  ACA amended ERISA law so their 90 day maximum applies to employers. Therefore, an employer could select a waiting period of up to 90 days.  First of the month following 60 days is not compliant with AB 1083.

This recent DMHC guidance resulted in changes to the waiting period options offered by some California health plans.  With all of the other health reform changes you have to remember we want to provide this quick reference chart.

Personally, I wish people would stop using the bill # and refer to the actual code.

So, what is it, under CA Law & Health Care Reform, 60 or 90 day maximum waiting – probationary period for new employees?

PPACA and CA regulations and law change DAILY!!!  

Waiting periods required by California health plans can be no longer than 60 days. Buck Consultants    So, it can’t be 1st of month after 2 month probation period..  

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FAQ’s  Art Gallagher

90-Day Waiting Period Limit 

245. We currently have a 180-day waiting period before coverage is effective. When will that have to be changed?
246. Can we change our waiting period to three months instead of 90 days?
247. Our plan currently has a 90 day waiting period and then coverage is effective on the first day of the month following 90 days. Will that satisfy the requirement? 
248. We currently have a 6-month waiting period and our plan year will not start until March 1, 2014. Can we apply the full 6-month waiting period to an employee hired in late 2013 or before March 1 of 2014?
249. We currently require new employees to complete an orientation period before becoming permanent employees and eligible for coverage. Are we required to include the orientation period as part of the waiting period?
250. If we require new full-time employees to complete a one-month orientation period plus satisfy our 90-day waiting period, are we automatically exempt from having to pay an employer mandate penalty for that 120-day period? 
251. What happens if our new employee is in their waiting period but has not yet reached 90 days when the new plan year begins on March 1, 2014?
252. Part-time employees are not eligible for our plan but there are situations where a parttime employee is promoted to full-time status. Assuming an employee worked as a parttime employee for more than 90 days, would we have to allow him to enroll immediately?
253. If we implement a 90-day waiting period but an employee fails to complete the enrollment forms in a timely fashion and coverage is delayed a month, will that violate the law? 
254. Only full-time employees working 30 or more hours per week are eligible for our plan.  Sometimes we have new hires with variable work schedules where it cannot be immediately determined if they will regularly work 30 hours per week. How can we
handle those situations without violating the waiting period rules? 
255. In addition to covering full-time employees working 30 or more hours per week, part-time employees also become eligible for coverage when they have completed a cumulative 1,200 hours of service. Will this have to be changed to comply with the 90-day rule?
256. We have employees covered by a multiemployer plan operating under a collective bargaining agreement that allows employees to earn eligibility for coverage by working hours for multiple contributing employers over a quarter. Is that allowed? Click here to view answers from Art Gallagher

Excerpt of Actual Law – HISTORICAL

ARTICLE 3.16. Nongrandfathered Small Employer Plans [1357.500 – 1357.516]  Definitions 1357.500

  Health & Safety Code §1357.506

(a) A small employer health care service plan contract shall not impose a preexisting condition provision upon any individual.

(b) A plan contract may apply a waiting period of up to 60 days as a condition of employment if applied equally to all eligible employees and dependents and if consistent with PPACA. A plan contract through a health maintenance organization, as defined in Section 2791 of the federal Public Health Service Act, may impose an affiliation period not to exceed 60 days. A waiting or affiliation period shall not be based on a preexisting condition of an employee or dependent, the health status of an employee or dependent, or any other factor listed in subdivision (h) of Section 1357.503. An affiliation period shall run concurrently with a waiting period. During the waiting or affiliation period, the plan is not required to provide health care services and no premium shall be charged to the subscriber or enrollees.

(c) In determining whether a waiting or affiliation period applies to any person, a plan shall credit the time the person was covered under creditable coverage, provided the person becomes eligible for coverage under the succeeding plan contract within 62 days of termination of prior coverage, exclusive of any waiting or affiliation period, and applies for coverage with the succeeding plan contract within the applicable enrollment period. A plan shall also credit any time an eligible employee must wait before enrolling in the plan, including any affiliation or employer-imposed waiting or affiliation period. However, if a person’s employment has ended, the availability of health coverage offered through employment or sponsored by an employer has terminated, or an employer’s contribution toward health coverage has terminated, a plan shall credit the time the person was covered under creditable coverage if the person becomes eligible for health coverage offered through employment or sponsored by an employer within 180 days, exclusive of any waiting or affiliation period, and applies for coverage under the succeeding plan contract within the applicable enrollment period.

(d) An individual’s period of creditable coverage shall be certified pursuant to subsection (e) of Section 2704 of Title XXVII of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-3(e)).

(Added by Stats. 2012, Ch. 852, Sec. 3.   Effective January 1, 2013.) 42 U.S.C. § 300gg-7, Section 10198.7(c) of the California Insurance Code, as amended by Statutes 2013-2014, 1st Ex. Sess., ch. 1, § 7 and Section 13575.1(c) of the California Health and Safety Code, as amended by Statutes 2013-2014, 1st Ex. Sess., ch. 2, § 2, and all of my qualified employees have complied with the waiting period For specifics – Please check the rules for each Insurance Company.   Here’s a Summary Chart for all CA Small Employer Insurance Companies ♦ Later Version? ♦

 (n) “Affiliation period” means a period that, under the terms of the health care service plan contract, must expire before health care services under the contract become effective

Health Reform §2708 42 US §300gg requires that Employees be eligible within 90 days.  DOL Guidance 2012-02 national underwriter.com Health Reform Facts Q & A 249   Final Federal Ruling 2.2014

However, in CA it will be 60 days.

4 comments on “90 Day Maximum Waiting Period?

  1. My hire date was July 9th but I didn’t receive benefits until January 1st.

    When I looked on my health insurance paperwork it shows my hire date as November 17th.

    We also accrued 1 week vacation a year but when I tried to take a vacation day in December I was told i didn’t have any available yet which makes sense since they switched my hire date.

    Is it legal to change my hire date like that and delay my benefits?

    • I can’t legally tell you what is legal. I’d be unlawfully practising law. Even if I were an attorney, we don’t know what the Judge would say.

      What does it say on your application for health insurance? Is there a declaration about perjury?

      Sample Blue Cross Employee Application

      Section G: Terms, Conditions and Authorizations
      Please read this section carefully before signing the application

      All statements and answers I have given are true and complete. I understand it is a crime to make or cause to be made a knowingly false or fraudulent material statement or material representation to an insurance company for the purpose of defrauding the company. Penalties may include imprisonment, fines or a denial of insurance benefits. I understand all benefits are subject to conditions stated in the Group Contract and coverage document.

      In signing this application I represent that:

      I have read or have had read to me the completed application, and I realize any acts of fraud or intentional misrepresentation of material fact in the application may result in loss of coverage within 24 months following the issuance of the coverage.

      I understand that coverages will become effective on the date established by the provisions of the group policy, contract and certificates issued thereunder

      Here’s some of the CA Insurance Laws on wrong information in an Insurance Application
      https://healthlaw.healthreformquotes.com/insurance-application-errors-must-disclosed/disclosure/

      You might also check with SHRM.org https://www.shrm.org/ResourcesAndTools/hr-topics/benefits/Pages/PPACA-Full-Time-Employees.aspx

      Does your company have an “orientation” period?

  2. Are Cobra benefits are available to employees if they resign before the 90 day probation period is completed?

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