Shopping for Health Insurance Quotes: Understanding Waiting Periods

One of the key provisions of the Patient Protection and Affordable Care Act (aka ObamaCare) that squeaked through Congress last March was the eventual elimination of waiting periods and other exclusions for pre-existing conditions. The provision is set to kick in for children this coming September (2010). At that point dependent kids under age 19 with pre-existing conditions cannot be denied coverage under their parents’ health plan. Neither will insurance companies be allowed to insure the child but exclude treatments for his or hers pre-existing condition. A similar provision for adults, however, won’t kick in until 2014. In the meantime, here’s what you need to understand about waiting periods when shopping for health insurance quotes.


Currently, every state and the District of Columbia has its own health insurance regulations that specify the maximum length for waiting periods, exclusionary periods and look-backs. These are in addition to any federal regulations relative to HIPAA (the details of which we won’t go into here). So the first thing you should do is check out your state’s requirements


There are basically three types of waiting periods you’re likely to encounter when shopping for health insurance: Employer-Imposed Waiting Periods; Affiliation Waiting Periods; and Pre-Existing Condition Exclusionary Periods.  Let’s take a look at each.


If you are among the majority of Americans whose health care insurance is provided through your employer’s group plan, you may have encountered an employer-employed waiting period when you changed jobs. The length of time will vary but it’s typically 90 days. It means you are not eligible to use your company-provided health care benefits until you’ve been with the company a minimum of three months. This protects your employer, the other members of the group and the insurance company from an employee who might take a job just to run up a huge medical claim and then quit.


An affiliation period is the waiting period enforced by an HMO before you can use the services or benefits. It cannot be longer than 90 days. Again, you’re likely to encounter this at a new job.


The most emotionally and politically charged waiting period is the pre-existing conditions exclusionary period. It grants the health insurance company the right to limit or exclude entirely coverage for any pre-existing condition, which can range from a skin rash to cancer and anything in between. This period typically ranges from six to 18 months, depending on where you live. It is often accompanied by a look-back period (ranging from six months to forever) which allows the insurance company to delve back into your medical records to see if you’ve ever been treated for a condition.  Depending on your plan, you may be granted credit toward the exclusionary period if you can show proof of continuous creditable health insurance coverage.  Federal HIPAA law allows you to avoid the waiting period for coverage if you meet these two criteria: you’ve had an acceptable health insurance plan for at least 18 months and you’ve have not been without coverage for more than 63 days.


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