Trends in Health Insurance Waiting Periods

by Michael Gugel, CPO @ GoCo

A waiting period is the amount of time a new employee has to wait before benefits kick in.  A company can choose a 0-day, 30-day, 60-day or 90-day waiting period for medical benefits.

The advantage of a longer waiting period is that the company saves a few months of premium payments on a new hire’s benefits. The downside is that your new hire might be pretty disappointed if they have to wait a really long time for their insurance to start.

As such, the average time a new employee has to wait before their benefits kick in is 37.9 days. Here are the typical waiting periods for companies on GoCo:

  • 0 days: 48%
  • 30 days: 27%
  • 60 days: 18%
  • 90 days: 7%

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In addition to the waiting period, companies can often decide if the benefits effective date gets rounded to the 1st of the month following the waiting period. You think of it as an adding an average of 15 days to the waiting period.

For example, if an employee was hired on June 15 with a 30-day waiting period, the plan can be configured so the employee’s benefits could start on July 15 or roll up to the 1st of the next month (August 1).

  • 76% of companies round the benefits effective date to the 1st of the month.
  • 24% just have benefits start right after the waiting period.

1st of the month is more common because it eases payroll administration for many companies, but with GoCo, we fully support both scenarios.

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