What's your waiting period and why?

Paige · October 2002

One of our smaller divisions is inquiring as to whether they should shorten their waiting time--it is currently 60 days.

What are typical waiting periods for smaller companies (less than 20 employees)? And what's the reasoning behind a "waiting period"--making sure the employee is going to stay with the company, allowing time to process paperwork?

Thanks.

Don D · October 2002

Our waiting period for coverage is zero time, first day coverage. I've experienced a variety of different waiting periods but never understood the rationale behind any of them. I do know that no waiting period dumps a bit more admin hassle on the third party administrator or insurer, but, that's certainly not my idea of an acceptable reason for making our employees wait.

Lori B · October 2002

Hi Paige

Our health/dental/vision has a 60 day waiting period. It used to be 90, but we shortened to avoid ees being forced into COBRA to avoid the 63-day break in service rule under HIPAA. The life and disability policies have a 6-month waiting period.

We use waiting periods b/c we have turnover issues. In addition, since so much of our benefits are handled in house, the admin aggravation of day one coverage would be an issue for us.

cebudragonlady · October 2002

The owners had decreed a 90-day waiting period since way back when - rationale unknown to anyone else. Sometimes for SOME new employees, the owners consent to a first day coverage or a 30-day waiting period...and I just submit the owners written authorization to the HMO/PPO/whatever. Most employees, like me, had to qwait the whole 90-days. COBRA is not cheap, and I simply did without for 3 months.

Just wondering, can any of the Forum members who work for employers in the medical/dental fields explain why costs are increasing so much more than inflation ?

Thanks,

Chari

Don D · October 2002

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Your letters to the carrier comment is interesting. I've always been told by the TPA that we cannot waive the waiting period if there is one, nor will the secondary carrier allow it.

Human Resources Manager · October 2002

The president at a former employer was frequently waiving the waiting period for new hires who had medical conditions and/or couldn't afford COBRA, whatever. Our insurer did not allow it either, the president sidestepped this rule by fudging the employee's start date. As far as I know, the insurer has yet to audit, however due a high experience rating, the premiums went up about 43% last year. I'm kinda glad I got downsized!

cebudragonlady · October 2002

Don-
It was our insurance broker who told us to have the owner write the letter and how to word it, in these cases. I am sure that our broker has some pull with the
right people in HMO/PPO/whatever.

Chari

Don D · October 2002

The reason I found that interesting is because we were self insured, therefore actually dictated most everything about our plan since we paid all the claims and owned the plan, only had a TPA doing the admin. The re-insurer (the group that picks up the claim after our multi-thousand deductible at the company) advised that they would disallow claims on the person if we did not follow the rules on waiting period. Fudging a start is another thing indeed. I just can't see a reason a company would take all that risk. The safest approach is for the company to pick up cobra for the individual (if insurance is the sticking point in the bargaining) until he satisfies the waiting period. Those of you who deal daily with 401K administration and other technical benefits admin items know the risks inherent in messing with the boundaries.

Rockie · November 2002

Hey Chari: I'll try to explain as best I can. I work for a large cardiology practice (24 docs) and it takes beaucoups of money to run this practice. In addition to the shortage of health care professionals and the staggering amounts of money that some specialized clinical areas demand and we must pay in order to run our practice, salary and benefit costs have skyrocketed.

In addition, last year Medicare cut tremendously the reimbursement level and our practice had to absorb a million and a half dollar cut in reimbursement. This means either prices go up to compensate or we see more patients (which we have more patients than we have room on our schedule now) or we cut expenses (which we did - cutting salary increases, always very popular, and layoffs of employees). Anyway....we may be facing more cuts if Medicare mandates another cut the first of the year, which they might.

Another problem is the price of drugs. If Medicare wants to mandate price control, I would suggest they target the drug companies and limit what they can charge for prescriptions. It's very sad when people have to choose between eating and taking their medications. We even have an indigent med program in our practice to try to assist these folks, but there are more of them than what we can supply.

This is just the tip of the iceberg, but may explain something about pricing in the medical field.

franfields · November 2002

We do not have a waiting period for medical. I enroll the new hires onto their system via the internet and it's an easy process. It was our choice when renewing our contract with the carrier.

We have first of the month following employment for dental because I mail in the enrollment and it takes time to process. That is how the contract works with the carrier, didn't really have a choice.

SandiF · November 2002

Not to mention the staggering cost of malpractice insurance.

As far as your original question...Employees are covered first of the month after date of hire, except for our cafeteria plan - first of month after 90 days, and our pension plan - after a year of employment.

Margaret Morford · November 2002

Chari,

While you didn't ask for it and I'm not an ERISA expert, (Note two disclaimers in the first twelve words!), I think you may be creating some liability by waiving the waiting period for some employees and not for others. You run the risk of some kind of lawsuit by all the other employees that had to wait the waiting period as well as coming under the scrutiny of the DOL. You might want to check that out.

Margaret Morford
theHRedge
615-371-8200
[email]mmorford@mleesmith.com[/email]
[url]http://www.thehredge.net[/url]

cebudragonlady · November 2002

Margaret-
Thanks for your pointers. I agree with your logic. The owner does what he wants,
giving different employees different waiting periods. It may just be only a matter of time, like you said. Here at this factory, logic is in suspended animation on some issues.

Chari

mbrumm · November 2002

We recently went from no waiting period to a 10 day waiting period. We did this because we went though a spell that people weren't even making it one week (medical reasons, old employer enticed back w/improved benefits, and employee was actually expected to work). This was a big pain since we have a cafeteria plan too, so we put in the waiting period to weed these problems out without penalizing the majority. Our carrier lets us set the waiting period.

Cindy Hanna · November 2002

We have a 90 day waiting period. Personally I think 90 days is to long, so many people can not go with out insurance for that long and COBRA is to expensive. The expense of Health Insurance is getting out of hand for both the employer and the employee.

Terri B · November 2002

We have no waiting period. But, say your date of hire is Oct 20th. Your health insurance will not start until Nov 1st. We are self insured and use a TPA. It is our choice on how to set it up. Our premiums are monthly, not per pay period. What that means is that 2 times a year when there are three pay days in the month no premiums come out of the checks. Everyone's coverage starts the 1st of the month following their date of hire. So, no wait technically. The purpose behind it is administrative ease.

Lola815 · November 2002

We have a 30-day waiting period. I don't really know why except that is what the owner decided before I started working here.

mrbill · November 2002

We have a 90 day waiting period, mainly due to our union contract stating this. We carry this to our salaried group, however, if need be I will enroll one earlier for Medical / Dental. However, not for Life Insurance, since if a new hire deceases before 90 days of employment, then the Company would hold the claim.
An earlier response asked why Medical Inflationis so much higher than Inflation in general. I have been to numerous seminars with HMO CEO's and even they do not have a handle on costs.

What's your waiting period and why?

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