California Gets On Board With ACA Waiting Period Rule

Effective Jan. 1, 2015, California state law regarding waiting periods for health care coverage will conform to the Patient Protection and Affordable Care Act’s (ACA) waiting period limit. Governor Brown has signed into law Senate Bill 1034, which will impose a 90-day limit on eligibility waiting periods for insured health benefits. The law also prohibits a health care service plan or health insurer offering group coverage from imposing a separate waiting or affiliation period in addition to any waiting period imposed by an employer for a group health plan on an otherwise eligible employee or dependent.

Conflicting laws. The ACA prohibits group health plans and health insurance issuers offering group coverage from applying any waiting period of more than 90 days before coverage starts. California also had enacted a law regarding waiting periods. That law imposed a 60-day limit on eligibility waiting periods for insured plans. The new state law repeals the 60-day limit and clarifies that waiting periods in addition to the ACA standard are not permitted.

“In a world of guaranteed issue and no preexisting condition exclusions there is no reason for health insurance companies to impose a waiting period in addition to an employer’s ACA compliant waiting period,” stated Senator Bill Monning (D-Carmel), who authored the bill. “SB 1034 will resolve confusions that exist because state and federal laws are not aligned, and I applaud the Governor for signing this important bill.”

The California Chamber of Commerce also noted, “Clarification of the law also will help multi-state employers by ensuring they have just one date to keep in mind when determining when a new hire or otherwise newly qualified employee must be enrolled in a health care plan.”

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