Myth: Although Health Care Reform allows an employer to impose a waiting period of up to 90 days for new employees to be covered by its group health plan, the employer is subject to a penalty of $400 for each employee who is required to wait between 30 days and 60 days for coverage, and a penalty of $600 for each employee who is required to wait between 60 days and 90 days for coverage.
Busted: These penalties for waiting periods of more than 30 days but less than 90 days were initially included in the employer shared responsibility requirements of the Patient Protection and Affordable Care Act. However, the penalty for waiting periods of more than 30 days and less than 60 days was eliminated by the technical corrections included as Title X of the PPACA. The penalty for waiting periods of more than 60 days and less than 90 days was then eliminated by the Health Care and Education Reconciliation Act, which was signed into law with the PPACA. So, the penalties never became effective, and under current law an employer is not subject to penalties for imposing a waiting period of not more than 90 days before new employees become covered by the employer's group health plan.