What the Rule Is
Under the ACA, a group health plan can’t make otherwise eligible employees wait more than 90 days for coverage to begin. A waiting period is the time between when an employee becomes eligible and when their coverage can start.
The rule applies to all group health plans, of any size, fully insured or self-funded, including grandfathered plans. It isn’t limited to Applicable Large Employers (ALEs).
How the 90 Days Work
- The limit is 90 calendar days, counting weekends and holidays. That isn’t the same as three months.
- Coverage must be able to start no later than the 91st day.
- Plans can set reasonable eligibility conditions, such as working a minimum number of hours, as long as they aren’t designed to get around the 90-day limit.
Examples of waiting periods that generally fit within 90 days:
- First of the month after date of hire
- First of the month after 30 days
- First of the month after 60 days
Carriers may also have their own rules for which waiting periods they offer.
Variable-Hour Employees
For new employees whose hours are uncertain, an ALE using a look-back measurement period to determine full-time status may follow special timing rules that allow a longer timeline before coverage begins.
Important: This information is provided for general educational purposes. It is not legal or tax advice. How these rules apply depends on each employer’s specific circumstances, so employers should review their situation with their own legal counsel, ERISA attorney, CPA or tax advisor.