Typically, employers require insurance carriers to wait 60 days, giving an employer a specific time frame for employees to become eligible for benefits. Then, this article will dig a little deeper into what that 60 day waiting period means, the implications for employees, and the rationale behind it for employers. By the end of this, you will have a good idea of how waiting periods play into health insurance plans and work.
What Is a Waiting Period?
The amount of time an employee waits until they can choose a health insurance plan is called a waiting period. This is also used by employers to get administrative matters taken care on prior to coverage commencing.
It can be a thing in health insurance plan like waiting periods may be different and these may get set up when the company starts or when the health insurance renewal happens. Common options include:
0 days: Immediate eligibility.
30 days: You begin eligibility one month after hire.
60 days: It begins two months when you hire.
An Explanation of the 60 Day Waiting Period
Employees hired on a particular date under a 60 day waiting period are required to wait fully 60 days before becoming eligible to elect health insurance. During this period employees complete this period and enter an open enrollment period and can pick their medical, dental, and vision plans.
60 Day Waiting Period Timeline Example
Let’s consider an employee hired on April 15th:
Waiting period satisfied: June 14th.
Open enrollment period: June 14th – July 14th.
Plan coverage effective date: July 1st.
Time savings is key to avoiding unnecessary stress; this structured timeline allows for employees and employers to have the time they need to process benefits enrollment smoothly.
Why Many Employers Choose a 60 Day Waiting Period
Employers may select a 60-day waiting period for several reasons:
Administrative Efficiency: Additionally, there is a huge amount of time to do employee details and make sure that all rules comply with the insurance provider requirements.
Cost Management: In high turn over locations, delaying benefits eligibility can reduce costs.
Alignment with Business Cycles: Employers can match brand new hires to its existing renewal cycles.
Benefits by Employee Class
Different waiting periods establish in some organizations based on benefits classes. For instance, part time or seasonal employees might have longer waiting periods than full time employees. During onboarding, or health insurance renewals, such classifications must be established.
The Employee Perspective
A 60 day waiting period for employees can feel like an eternity, or at least much longer, for employees who need immediate access to health coverage. However, this timeline can be understood by employees so that they can plan accordingly. During the waiting period, many new hires take temporary solutions such as short term health plans.
Maximizing Open Enrollment
Once the waiting period is over, employees get 30 days to elect plans. But this open enrollment phase is important because it will determine what they’re covered for the entire year. When selecting coverage employees should take the time to carefully review plan options and think about their healthcare needs.
Legal Considerations
Again, it depends on the regulation that the employer is adhering to, including for example, regulations under the Affordable Care Act (ACA) which sets a waiting period cap of 90 days. The 60day option fits well in this range of limits allowing companies the elbow room to operate and there is compliance as well.
Disclaimer
Ths article does not constitute legal or tax advice. Specific concerns for which to consult a legal or tax professional.
Conclusion
It is 60 day waiting period for health insurance that is a balance between administrative efficiency for employers and the transparent and manageable time frames for employees. Whether it’s to help an employer or an employee understand how waiting periods work, their legal ramifications and their duties in the benefits enrollment process, they can be an important tool for both.
That’s why it’s important to understand waiting periods, whether you are an employer designing benefits packages or an employee selecting your choices.
