Short answer: A waiting period is the time a newly eligible employee must wait before health coverage begins. Under the ACA, a group health plan’s waiting period cannot exceed 90 days, so many employers use “first of the month following 30 days” to stay safely compliant.
A waiting period is the time that must pass before coverage becomes effective for an employee who is otherwise eligible. The ACA caps it: a group health plan’s waiting period cannot exceed 90 days. Note that 90 days means 90 calendar days, including weekends and holidays, not three months.
Because a strict 90-day count can land awkwardly mid-month, many employers use a payroll-friendly design like “first of the month following 30 days” of employment, which stays within the limit. Employers may also apply a bona fide orientation period of up to one month before the waiting period starts.
Setting the waiting period is a balance: a longer wait reduces cost and churn from short-tenure hires, while a shorter wait helps recruiting and reduces gaps in coverage. For applicable large employers, the waiting period also interacts with the ACA employer mandate’s timing rules for offering coverage to full-time employees.
Sources
- ACA 90-day waiting period limit: 26 CFR §54.9815-2708; PHS Act §2708.
Content history
Originally published: June 16, 2026
Last reviewed: June 16, 2026