Understanding the Affordable Care Act’s 90 Day Waiting Period Rule

Under the Affordable Care Act (ACA), group health plans and health insurance issuers cannot have a waiting period that exceeds 90 calendar days for eligible employees to access health coverage. This rule ensures that once someone meets the qualifications to be covered, they don’t face a long wait before benefits begin.

Who Does This Apply To?

The 90-day waiting period rule applies to:

• Employers offering group health plans.

• All eligible employees, assuming they meet the plan’s standard eligibility criteria.

The 90-day waiting period rule does not require employers to offer health coverage, but if they do, they must comply with this waiting period limit.

What is a Waiting Period?

A waiting period is the time that must pass before health coverage becomes effective after an employee is otherwise eligible. For example, if an employee is eligible for health benefits on their first day of work, their coverage must begin no later than 90 days after that date. A waiting period is often utilized by employers to ensure that the employer-employee relationship will work out before the employee is offered benefits.

Common Scenarios

Scenario 1: Immediate Eligibility

• An employee is eligible for coverage on their hire date.

• The employer can set coverage to begin on the 1st of the month following 30 days of employment.

• That’s well within the 90-day rule and compliant.

Scenario 2: Monthly Start Dates

• Coverage begins on the 1st of the month after 90 days.

• This may go beyond the 90-day limit depending on the hire date.

• Employers need to ensure that the total wait never exceeds 90 calendar days. In this scenario, an employer should consider changing the waiting period to 1st of the month following 60 days.

If you are offering group health insurance, make sure your eligibility and enrollment policies align with the 90-day ACA rule. Missteps can lead to compliance issues and penalties, so it’s important to review your onboarding and benefits processes. Your benefits broker should be able to guide you through this process but never hesitate to ask if you are usure about the guidelines you are setting for your business’s health insurance waiting period.