Health insurance waiting period calculator

Find the latest coverage start date

The eligibility date is usually the hire date. For someone moving from part-time to full-time, or finishing a probation your plan requires, it's the date they first meet the plan's eligibility terms. The calculator counts every calendar day, as the rule does.

The 90-day rule

Under the ACA, a group health plan can't make an otherwise eligible employee wait more than 90 days for coverage to start. The rule applies to every group health plan, regardless of company size, and to insured and self-funded plans alike. It's separate from the employer mandate, which has its own timing rules for new full-time hires at larger employers.

• All calendar days count, including weekends and holidays. "90 days" is not "three months".
• Coverage can start earlier. The 90 days is a ceiling, not a requirement; many startups cover new hires from day one.
• Eligibility conditions are allowed if they're not designed to dodge the rule, such as a job classification or meeting an hours requirement. A cumulative-hours requirement can't exceed 1,200 hours.
• An orientation period of up to one month can come before the 90 days, if it's a real period for training or evaluation.

Worked examples

Choosing a waiting period for your company

For most startups, I'd use date of hire or the first of the month after hire. Waiting periods save a little premium but cost more in recruiting: new hires either go uninsured, pay for COBRA from their last job, or buy a short-term plan. If you want a waiting period to manage turnover, 30 days is plenty.

Write the rule into your plan documents and your offer letters the same way, and apply it to everyone in the same class. Our guide to health insurance waiting periods covers rehires, transfers and variable-hour employees.

Variable-hour and part-time employees

When a plan covers only employees who work enough hours, and you can't tell at hire whether someone will, the rules allow a measurement period. You can track their hours for up to 12 months to see whether they average 30 or more a week, then offer coverage. Including any administrative period, coverage must start no later than 13 months after their start date, plus the days left until the first of the following month.

Plans can also require a set number of cumulative hours before someone is eligible, but no more than 1,200 hours. After that, the 90-day clock starts.

Rehires, transfers and job changes

• Rehires: if someone leaves and comes back, plan terms decide whether they're a new employee. Under the employer mandate's rules, an ALE can treat a full-time employee as new only after 13 weeks without hours (26 for schools).
• Part-time to full-time: the waiting period starts when they move into an eligible role, not on their original hire date. Many plans waive it for internal moves.
• Transfers from a related company: if both companies are under common control, the employee usually shouldn't start a new waiting period.
• Acquisitions: acquired employees often join the buyer's plan without a waiting period, so coverage stays continuous. Time already served toward the seller's waiting period can usually be credited.

How the waiting period fits with the employer mandate

If you have 50 or more full-time employees, a second rule applies to new full-time hires. The IRS won't assess a penalty for a new full-time employee during their first three full calendar months, as long as they're offered coverage by the first day of the fourth. In practice, a waiting period that complies with the 90-day rule will also satisfy this in nearly every case, but check hires in the middle of a month.

For the penalty side, see the employer mandate penalty calculator.

Putting the waiting period in writing

Most disputes about waiting periods come from mismatched documents: an offer letter that says "benefits after 90 days", a plan document that says "first of the month after 60 days", and a carrier setup with something else again. Pick one rule and use the same words everywhere. If the documents disagree, the plan document usually controls, but a new hire who was promised earlier coverage in writing has a fair complaint, and fixing it after the fact often means retroactive enrollment and premium adjustments with the carrier.

• Plan document and summary plan description: the legal source of the rule.
• Carrier or administrator setup: make sure the eligibility rule in their system matches.
• Offer letters and the handbook: state the rule and the expected start date for that hire.
• Payroll: deductions should start with coverage, not with the first paycheck.
• Your onboarding checklist: send enrollment materials early enough that the new hire can choose a plan before coverage starts, so nobody misses the first month because a form was late.

What new hires should know

If you're the new hire, the gap between your old coverage ending and your new coverage starting is a real risk. You have options:

• COBRA from your last employer. You can elect it within 60 days and coverage is retroactive. See the COBRA deadline calculator.
• A marketplace plan. Losing coverage gives you a special enrollment period.
• A spouse's plan. Losing your own coverage is a qualifying event that lets you join it.

Our new hire benefits checklist covers what to send new employees so nothing falls through.

Covering new hires quickly

With a group plan, including Diamond, the company chooses the waiting period, and coverage can start as early as the date of hire.