Navigating Probationary Periods, Enrollment Adds, and Qualifying Events

August 1, 2017

When you get a new job, there’s an innate excitement that may make you look over or forget to ask about certain aspects of the job. Often, employers use probationary periods that affect benefits of new hires.

What’s more is healthcare issues relating to qualifying events, adding new employees, or terminating coverage can be confusing for both employers and their employees.

Learn more about each of these areas below.

What is a Probationary Period?

The purpose of having a probationary period for employers is to evaluate a newly hired employee and make the assessment for any performance issues. Personnel costs such as benefits, training, and wages are where employers spend the most money when it comes to hiring a new employee.  

Having a probationary period in place protects the employer from committing to both time and training, as well as the financial costs associated with bringing a new hire on board in the event they are not a good fit for their company.

What are The Rules When Implementing Probationary Periods?

The Affordable Care Act Federal guidelines put in place limit the number of days an employer is allowed to impose a probationary period for enrollment into the health insurance benefits. Limits are no more than 90 days after the date of hire.

Most insurance carriers offer probationary periods of first of the month following date of hire, first of the month following 30 days, or first of the month following 60 days from date of hire.

Depending on the hire date for a new employee, those who are hired any time after the first of the month may end up having a longer waiting period (closer to 90 days), should the employer choose to elect a 60-day waiting period.

Timely Notifications for Qualifying Events, Adding a New Employee and Terminating Coverage

Employees can make changes to their benefit elections during the year only if they have a qualifying event. Those events include:

  • Adoption
  • Birth
  • Change of spouse’s benefits through their employer
  • Marriage
  • Divorce
  • Gain or loss of employment
  • Death of a spouse or dependent

Employees have 30 days from the date of the qualifying event to notify their employer about a qualifying event. If these deadlines are missed, then changes are not permitted until the next open enrollment period. Employers also will have 30 days to notify their insurance carrier of any newly hired employees that need to be added to the plan.

Be sure to read the Employer Administrative Manual from your health insurance carrier to familiarize yourself with their guidelines surrounding retroactive termination and enrollments.  Many carriers will only allow 90-day retroactivity period in which to refund premiums for a terminated employee as well as 90 days to bring on a newly hired employee. This is a general guideline for information purposes only please check with your carrier for specifics.

Employees should provide the date for which any qualifying event occurs as it relates to terminating the employee’s benefit coverage. Regardless of this date, coverage will be through the end of the month for which the qualifying event date occurred.

When terminating an employee’s health plan, the employer is obligated under COBRA (for groups of 20 or more employees), ERISA, or state law to notify the employee that the benefits are being canceled. For COBRA-eligible employers, employees must be notified within 14 days after the qualifying event of the right to continue their current medical coverage.

Oregon groups under 20 employees who are not eligible to COBRA are subject to State Continuation, allowing employees up to 9 months of continuous coverage. For specific questions please contact get-benefits our preferred insurance agent.

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Navigating Probationary Periods, Enrollment Adds, and Qualifying Events

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