What is an insurance lock-up period?


Quick Answer

An insurance lock-up period is generally called an insurance waiting period. This waiting period is the amount of time that must pass before a new employee may enroll in a group insurance plan or before actual coverage begins, according to HowStuffWorks. This period is stipulated by the employer or insurance company. There are three types of waiting periods: employer-sponsored, affiliation and pre-existing condition exclusion.

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Full Answer

The employer-sponsored waiting period is most common. In this situation, the employer stipulates that new employees must wait a set amount of time before they can join the employer-sponsored group plan, states Health Affairs Blog. The Affordable Care Act prohibits this time period from lasting longer than 90 days, as of Movember 2015.

The affiliation period is a waiting period imposed by the insurance company and not the employer, says the U.S. Department of Labor. The amount of time is limited to no more than two months, or three months for a late enrollee, from date of enrollment.

The pre-existing condition exclusion period is imposed by the insurance company, notes the U.S. Department of Labor. This is a waiting period that is placed upon those who have a medical condition prior to enrolling in the insurance plan. The duration of this waiting period is one to 18 months.

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