What Is a Waiting Period in Health Insurance?
Demystify health insurance waiting periods. Understand how these common plan features affect your coverage start and benefit access.
Health insurance plans often include a waiting period. This period represents a specific duration during which new enrollees may not be eligible for certain benefits or coverage.
Defining Waiting Periods
A waiting period in health insurance refers to a set amount of time that must pass after an individual enrolls in a health insurance plan before certain benefits or coverage become active. During this timeframe, the insurance provider will not cover medical expenses related to conditions or treatments subject to the waiting period. For instance, a common initial waiting period is around 30 days after policy purchase, during which most claims, except for accidental injuries, may not be accepted.
Insurance companies implement waiting periods primarily to manage risk and prevent potential misuse of the policy. Without these periods, individuals might purchase insurance only when they anticipate high medical costs or after a diagnosis, file immediate claims, and then discontinue coverage. This would undermine the sustainability of the insurance system.
Waiting periods differ from other health insurance terms such as deductibles, copayments, or out-of-pocket maximums. While deductibles and copayments refer to the portion of costs a policyholder pays for covered services, and out-of-pocket maximums cap annual spending, a waiting period determines when coverage for specific services or conditions begins.
Varieties of Waiting Periods
Waiting periods can apply in several contexts, impacting when and how coverage becomes available. One common type is the general enrollment waiting period, which applies to new employees or enrollees in a plan before any coverage begins. Under the Affordable Care Act (ACA), employer-sponsored health plans are prohibited from imposing a waiting period that exceeds 90 days for eligible employees.
Historically, pre-existing condition waiting periods applied to conditions an individual had before coverage began. The ACA largely eliminated these exclusions for most health plans, including individual and group plans. This ensures that insurers cannot deny coverage, charge higher premiums, or impose waiting periods based on pre-existing conditions. However, limited exceptions may still exist for certain grandfathered plans, short-term health plans, or specific benefits not subject to ACA rules, such as some Medicare supplemental insurance (Medigap) plans.
Even after general coverage starts, some plans may have specific benefit waiting periods for particular services. These are distinct from overall plan waiting periods and often apply to procedures that can be planned or are considered non-emergency. Common examples include:
Maternity benefits, which can have waiting periods ranging from 9 months to 2 years.
Orthodontics.
Vision care.
Major dental procedures like crowns or dentures, which may require waiting 6 to 12 months.
How Waiting Periods Are Determined
The length of a waiting period is influenced by regulatory frameworks and the specific design of an insurance plan. Federal laws, such as the Affordable Care Act, set maximum waiting period lengths for employer-sponsored plans. Some states may also have laws that further regulate or prohibit certain waiting periods, particularly for pre-existing conditions.
The ultimate duration of a waiting period is determined by the health insurance plan’s terms and conditions, which can vary significantly between different policies and insurers. These details are typically outlined in the plan documents, such as the Summary of Benefits and Coverage.
The concept of “creditable coverage” can significantly impact waiting periods. Creditable coverage refers to prior health insurance coverage that can reduce or eliminate waiting periods, especially where pre-existing condition exclusions might still apply in limited circumstances. The Health Insurance Portability and Accountability Act (HIPAA) introduced requirements for group health plans to count prior creditable coverage. This generally prevents new plans from imposing a pre-existing condition exclusion if an individual had continuous coverage without a significant break, typically defined as 63 days or more, before enrolling in the new plan.
To ascertain the specific waiting periods applicable to a particular health insurance plan, individuals should review their plan documents or the Summary of Benefits and Coverage. If these documents are unclear, contacting the insurance provider directly or the human resources department for employer-sponsored plans can provide clarification.