New Law Prevents Health Insurers' Waiting Period For Small Business Employees

Beginning Jan. 1, health plans offering insurance through small employers in California will no longer be allowed to impose a waiting period before coverage starts. 

As of 2015, federal law prevents health insurers from imposing a waiting period longer than 90 days on small business employees. But California decided to eliminate any such waiting period initiated by an insurer.

"The financial actuarial reasons for these waiting periods really disappeared with the Affordable Care Act," says Micah Weinberg with the Bay Area Council.

He says insurers used waiting periods in an era when people could be denied health coverage because of pre-existing conditions. Insurers were concerned that people who had been denied coverage would take a job to get health care.

Weinberg says the Affordable Care Act changed the rules so nobody could be denied.

"You no longer have people joining small employers just to get health insurance," he says.

California employers may still impose a waiting period for health coverage - if for example, a new employee is in a probationary period.