Employee Waiting Periods and Affiliation Periods
Employer Waiting Periods
As discussed in the last section, an employer waiting period is defined as a period set up by the employer that requires a new employee to wait a given time period before beginning their employee benefits, which can include pensions and life insurance in addition to health insurance. In contrast to affiliation periods and pre-existing condition exclusions, employer waiting periods have relatively few restrictions. For example, the length of an employer waiting period can be entirely determined by the employer and therefore can last over a year if they choose. However, in order to remain competitive to potential employees, most employer waiting periods usually range from one to three months.
There's one rule that does apply to employer waiting periods and it deals with pre-existing condition exclusion periods. If you've received a pre-existing condition exclusion period from your health insurance company, then your employer waiting period can't add to this period. Instead, these two waiting periods are served concurrently, with both your employer waiting period and your pre-existing exclusion period beginning on the same day.
Because you have absolutely no employee benefits during this waiting period, it's important to have additional health care in place until your new benefits kick in. Many times this means that you simply continue your COBRA benefits from your former job for an additional one to three months. If your COBRA benefits are exhausted, getting an individual plan may be an option if you're in relatively good health.
If you have an HMO plan, you may encounter an affiliation period before being able to use your HMO benefits. Unlike the employer waiting periods, an affiliation period is regulated by the Health Insurance Portability and Accountability Act, or HIPAA, and can't exceed two months from your enrollment date, or three months for late enrollees. During this period, the HMO doesn't provide you with benefits and you don't provide them with premiums. HIPAA was passed on July 1, 1997, and has had a profound effect on the availability of health care in this country.
The benefit of having an HMO that requires an affiliation is that they can't impose a pre-existing condition exclusion period on you. In fact, if an HMO plan has an affiliation period, they can't deny you coverage based on your pre-existing conditions. If this wasn't a regulation, it would be tempting for a group HMO plan to pick and choose those who would get an affiliation period and those who receive the often longer pre-existing condition exclusion period.