Benefit Eligibility Date

[Guest KenMcCormick]

I have been researching average eligibility enrollment date information for health and welfare benefits with limited success. Currently our benefits are effective the 1st of the month coincident with, or following, date of hire. There has been a request to change this wait period to effective upon hire. Does anyone know of an average wait time for benefit eligibility?

[papogi]

I don't know an average waiting period for all of our clients, but I can tell you that it depends largely on the industry group. "Hire date" waiting periods are quite common in blue collar, manual labor, and trade businesses. Longer waiting periods are more common as you move into service industries, such as banking and other office jobs. Hope this helps.

[mroberts]

Most of the time health benefits begin on the date of hire. But as papogi indicates, it is specific to industry. I have seen a lot of plans in which health benefits were effective on the first of the month following. It's really up to you on how you want to handle it. Just remember, by making the benefit effective the date of hire, you are opening yourself up to more of a chance when it comes to adverse selection.

[GBurns]

Most health plans condition eligibility to the length of the probation period, with eligibility being either 30 days after the end or the 1st of the next month. This seems to be based on industry practice within the geographical area.

[jeanine]

As I read these posts I am certain this varies from geographic region, and probably due to state law. Most of our insured groups have a 90 day waiting period for coverage. Rare is the group in this area that has coverage beginning on the first day at work. The only exception to the waiting period is when a new group comes on from another insurance carrier, in which case, according to state law, we can't impose any waiting period.

[papogi]

In response to Jeanine, I will tell you that all of our clients are self-funded, and state laws concerning any waiting periods generally do not apply to any of them. The waiting periods in their documents are designed by each respective employer. I will guess that about half have no waiting period, and again, they are usually blue collar industries where there is a history of unions, a fear of unions, or a lack of desire on the HR department's part to explain complicated benefits with waiting periods. Very, very few of our self-insured clients have a waiting period as long as 90 days.

[GBurns]

So there you have it.

Jeanine says 50% of her insured groups have a 90 day waiting period.

papogi says that 50% of his self-funded groups have a waiting period but not as long as 90 days. Also 50% have no waiting period.

GBurns says that most have a waiting period that matches the probation period, which is usually 90 days.

mroberts says that most have no waiting period.

papogi...

Does this also mean that most of your groups have no probationary period? In my experience most employers still use probation periods and employees are not usually eligible for any benefits until that period is up. Even if the get benefits the 1st day after the end of the probation period it would still not be 1st day of employment coverage but 1st date of eligibility coverage.

[papogi]

I'm going to clarify something. Probationary period and waiting period are usually used interchangeably, but I know there is a difference. A probationary period is applied only once, and is used at the beginning of a policy. It is usually what people really mean when they say the term waiting period. The waiting period actually can apply more than once, as is typically seen with disablility income coverage. To answer your question, most of our clients do not have a probationary period. The usage that I am speaking of is the date when medical/dental/vision/STD etc. become effective. In some cases, clients will have the 1st of following month, 30 day wait, 60 day wait or 90 day wait, but the 60 and 90 and any longer are very uncommon. We service self-funded clients from all over the country, but mainly on the east side of the country.

[GBurns]

Probationary periods relate to work and hire date and do not relate to insurance etc.

Waiting periods do not relate to work or hire date but relate to insurance etc.

They are not interchangeable but might coincidentally be related or run concurrently.