What Is the 90-Day Waiting Period for Health Insurance?

The 90-day waiting period for health insurance is a federal regulation under the Affordable Care Act (ACA) that sets the maximum time an employer can make an eligible employee wait before enrolling in a company-sponsored health insurance plan. This rule applies to employers who offer group health insurance, ensuring that employees gain access to coverage within a reasonable timeframe.

While employers are not required to provide health insurance, those who do must comply with this ACA waiting period rule.^[1] Companies can choose to offer coverage sooner, even from an employee’s first day, but exceeding 90 days is not allowed. The goal of this regulation is to prevent excessive delays in access to healthcare benefits.

Key Considerations for Employers Regarding the 90-Day Waiting Period

Employers must understand the ins and outs of the new hire waiting period for health insurance to ensure compliance with the ACA and maintain transparency with their employees. Below are some crucial aspects:

1. Compliance with the Affordable Care Act (ACA)

The ACA mandates that employers offering group health plans must make coverage available to eligible employees no later than 90 calendar days after their start date. This includes weekends and holidays—meaning the waiting period is strictly 90 consecutive days, not three months. Failure to comply can lead to penalties and legal consequences.

2. Can Employers Offer Coverage Before 90 Days?

Yes. Employers are free to offer health insurance immediately upon hire or within a shorter waiting period, such as 30 or 60 days. Many companies choose to reduce the waiting period to attract top talent, as providing earlier health coverage can be a competitive advantage in hiring.

3. Can Different Employee Classes Have Different Waiting Periods?

Yes, different waiting periods may be applied to different classes of employees (e.g., full-time vs. part-time, management vs. hourly workers), provided they are fair and non-discriminatory.^[2] Generally:

• Small businesses (under 100 employees) often have a single waiting period for all employees.
• Larger businesses (100+ employees) have more flexibility in structuring different waiting periods for different job categories.

However, employers must ensure that these classifications are legitimate and comply with anti-discrimination laws.

Why Employers Should Understand the 90-Day Waiting Period

Employers benefit from understanding this rule for several reasons:

1. Avoiding Legal Issues

Failing to offer health coverage within 90 days could expose an employer to legal disputes, including potential lawsuits from employees who were denied coverage during the required timeframe. Ensuring proper implementation of the ACA waiting period minimizes legal risks.

2. Setting Clear Expectations for Employees

Transparency about the new hire waiting period for health insurance helps new employees plan for their medical needs and avoid confusion about when their coverage begins. This can improve employee satisfaction and retention.

3. Enhancing Employee Benefits for Competitive Advantage

Offering a shorter waiting period can make a company more attractive to job seekers, especially in competitive industries. A health insurance plan is a top priority for many workers, and reducing the waiting time can give employers an edge in hiring and retaining talent.

How Employers Should Communicate the Waiting Period

To ensure employees are well-informed about the 90-day waiting period for health insurance, employers should:

• Clearly outline the waiting period in offer letters and onboarding materials.
• Include details in the employee handbook to prevent misunderstandings.
• Discuss the policy during new hire orientation to reinforce transparency.
• Provide written confirmation when an employee becomes eligible for coverage.

The Impact of the Waiting Period on Probationary Employees

Some employers also have a probationary period during which they assess a new hire’s performance. However, it’s essential to note that this period counts toward the 90-day waiting period. Employers cannot require a separate probationary period before starting the insurance waiting period. The clock starts ticking on an employee’s first day of employment.

Does a 90-Day Waiting Period Equal Three Months?

No. A common misconception is that a 90-day waiting period equates to three months. However, 90 days is counted as consecutive calendar days, including weekends and holidays. If the 91st day falls on a weekend or holiday, coverage must begin on or before that date.

Get Started with a Health Insurance Broker

Understanding and correctly implementing the 90-day waiting period for health insurance is crucial for both compliance and employee satisfaction. Employers who offer HSA-compatible health plans or other group insurance policies should clearly communicate the waiting period while considering whether reducing the timeframe could benefit their workforce. By doing so, they can remain competitive, avoid legal risks, and build a transparent and supportive work environment for their employees.

By staying informed about ACA waiting period rules, employers can make strategic decisions about their health benefits while ensuring compliance with federal law. If you have questions about how to structure your health insurance waiting period, consult a knowledgeable group health plan broker like Taylor Benefits Insurance to ensure the best approach for your business and employees.

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References:
1. https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/affordable-care-act/for-employers-and-advisers/90-day
2. https://www.irs.gov/newsroom/worker-classification-101-employee-or-independent-contractor