The ACA defines a waiting period as the period that must pass before coverage for an individual who is otherwise eligible to enroll under the terms of a group health plan can become effective. The ACA prohibits a group health plans and a health insurance issuer from applying a waiting period of more than 90 days., Until recently, California law prohibited group health care service plans and group health insurance policies from applying a waiting period of more than 60 days. In order to harmonize the state and federal rules governing waiting periods, on August 15, 2014, Governor Jerry Brown approved a bill that repeals California's 60-day waiting period limitation, effective January 1, 2015.
The new law prohibits health care service plans and health insurance providers offering group coverage from imposing a separate waiting period in addition to an employer-imposed waiting period. California employers may now implement a waiting period of up to 90 days, in conformity with the ACA. The ACA also allows employers to have a one-month orientation period in addition to the 90-day waiting period.
Employers who adopt the Look Back Measurement Method Safe Harbor under the ACA's Employer Mandate can also implement a 90-day administrative period without potentially running afoul of California's 60 day waiting period law. However, employers should note that if they adopt a one-month orientation period combined with a 90-day waiting period, they may have exposure to penalties under the employer mandate. Employers who reasonably expect new hires to be full-time under the ACA must offer such employees affordable coverage no later than the first day of the fourth calendar month following the employees start date in order to avoid a potential penalty.
The full text of the bill is available at: http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201320140SB1034