Document Archive > California Health Care Reform: Waiting Periods

On March 22, 2013 we published a Benefits Alert (2013-8) discussing Health Care Reform in California, including California legislation, AB 1083. The purpose of this Memorandum is to expand upon the waiting period provisions contained in that legislation.

At the time, AB 1083 was thought of as “small group market reform.” It included a new 60-day maximum waiting period for full time employee eligibility. Due to it’s setting, most practitioners assumed that the 60-day rule applied only to small employers (under 50 employees).

After discussions with the California Department of Insurance (Cal. DoI) and confirmation from the bill’s authors, it is clear that the 60 day maximum waiting period applies to all insurance contracts issued in California, whether as large group or small group policies, whether grandfathered or not grandfathered. Additionally, HMOs cannot have affiliation periods (if any) that exceed 60 days.

Effective Date

Policies issued or renewed on or after October 1, 2013 will contain the 60-day rule effective on or after January 1, 2014.

What This Means

Employers both inside and outside of California who provide health care coverage for employees under a California insurance contract, regardless of the number of employees, must comply with the 60 day waiting period maximum rather than the Patient Protection and Affordable Care Act’s (ACA) 90 day maximum. It also is important to note that the 60-day rule, just as in the case of the federal rule, does not mean “first day of the month following 60 days.” Both the 90-day rule and the 60-day rule are to be read literally.

The 60-day rule does not apply to self-insured plans. The ACA’s 90-day rule will apply.