Group Health Insurance Waiting Periods for new Employees

It has become standard procedure for employers to place waiting periods on enrollment into their company’s group health insurance plan. These waiting periods can range from 30 days to 6 months, but are most commonly set at 90 days.

The justification for these waiting periods is the fact that every employee enrolled in a group health insurance plan is an additional expense to the employer. It is understandable for an employer to want to make sure they have hired employees who will be long-term assets to the company before obligating themselves to spend even more money.

The minimum contribution required from employers on behalf of those employees in their group health insurance plan is 10% of the Single premium. However, the average contribution is much higher and is closer to 50% of the Single premium. Employers cannot discriminate and are therefore required to contribute the same percentage for all employees.

Waiting periods are designed to protect the financial outlay of the employer, but can also be the cause for additional strain on a new employee’s financial situation. The additional delay before coverage can begin means that the employee will be required to obtain, or continue, coverage elsewhere. The only two options for such interim coverage are COBRA or an individual health insurance plan, neither of which is inexpensive.

COBRA is a continuation of benefits provision that allows an employee to continue, at his or her own expense, their group health insurance plan from a previous job. Very often the cost of coverage creates a problem for the former employee when they see, for the first time, the true monthly cost of their benefits. These benefits can usually be continued for up to 18 months.

Individual health insurance plans are much less comprehensive than group plans, and at a cost that is often significantly higher. The result is more money spent by the employee for similar benefits, or a much lower quality plan that is at least affordable. Neither of these options is attractive, but there is little else that can be done during the new employer’s waiting period.