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Waiting Periods And What They Mean For Health Insurance Coverage

2011-02-23

Health insurance coverage is important for everyone to have. With the recent passage of the new health care law, everyone will be required to have some type of health insurance by the year 2014. However, purchasing new health insurance does not always mean immediate access to those benefits. In some cases, vendors require a health insurance waiting period. A waiting period means that the insured must wait a specified period of time before coverage begins. However, a waiting period can take on different meanings depending on how it is being applied to specific situations.

The most common use of health insurance waiting periods comes from employer-sponsored health insurance coverage. Corporate group policies are expensive and when these plans are frequently used and incur high expenses, costs go up dramatically. Employers will require a new-hire to sit through a health insurance waiting period to ensure the new-hire does not file a large claim and immediately leave the company. This kind of requirement is akin to a company immediately considering a new-hire to be on probation for a specific length of time. Waiting periods vary in length and are usually mandated by the employer and typically last between one and three months. If you have obtained a pre-existing condition exclusion from a health insurance vendor, then the waiting period dictated by your employer cannot be added to the exclusion.

HMO plans have waiting periods as well but are often called "affiliation periods" to help provide a distinction. Health insurance coverage from an HMO can be delayed as much as two months based on HIPAA law. There are two key differences between this type of waiting period and the one discussed above. During the HMO health insurance waiting period, you are not provided with coverage but are also not required to pay premiums. Lastly, once the HMO waiting period has expired, a pre-existing condition cannot cause a denial of coverage.

The last type of health insurance waiting period applies to people with pre-existing conditions. Obtaining health insurance coverage from a new employer or new insurance provider may incur a waiting period of up to 18 months. During this time it is possible to receive no coverage or limited benefits. However, if you can show that you have received at least one year of coverage under a previous plan it is possible to bypass a waiting period. The key here is that you must not have had a lapse of more than 63 days.

It is important to be aware of the implications a waiting period can have on your health insurance coverage. Alternative coverage such as COBRA may need to be purchased until the waiting period expires.

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