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Employer Health Care Reform Guide

Limits on Probationary Periods

The waiting – or probationary – period is the period of time set by an employer before coverage becomes effective for a new employee enrolling into the group's health benefit coverage.

Group health plans and health insurance carriers that offer group coverage may not apply a probationary period that exceeds 90 days.

The probationary period provision applies to grandfathered and nongrandfathered plans, and to fully insured and self-insured/ASO groups.


What is the Probationary Period?

The probationary period is the period of time set by an employer before coverage becomes effective for a new employee enrolling into the group's health benefit coverage.

What are the Probationary Period Maximums?

Under the ACA provision, the maximum probationary period is 90 days for group health plans and health insurance carriers that offer group coverage.

Because Small Business Group members may only be enrolled on the first of the given month, the longest probationary period a Small Business Group employer may impose is the First of the Month Following (FOMF) 60 days.

Does the federal law apply to all plans?

The federal ACA provision applies to:

  • Grandfathered and nongrandfathered plans.
  • Fully insured and self-insured/ASO groups.
  • Groups with collective bargaining agreements (CBAs).

It does not apply to student health plans since, under the ACA, student health plans are treated like individual plans.

Is the probationary period for COBRA participants, retirees or early retirees the same as for active employees?

No. The probationary period for COBRA participants, retirees and early retirees may be different than the probationary period for active employees. COBRA participants, retirees and early retirees typically would have no probationary period, whereas one may be imposed for all other classes of employees.

Are groups that manage their own probationary periods required to adhere to the ACA probationary period regulation?

Yes. Groups that manage their own probationary period are expected to adhere to applicable federal regulations.

What do groups do if their probationary period exceeds the new limits?

Groups that have a probationary period that falls outside the new limits must change their probationary period.

Are groups allowed to have shorter probationary periods or waive the probationary period altogether for rehires?

Yes. There are no federal rules that prohibit an employer from waiving the probationary period if an employee is reinstated/rehired.

Can groups continue to require employees/plan participants to satisfy a minimum number of hours or days of service before the probationary period begins?

Yes. As long as the intent of the requirement is not to circumvent the probationary period regulations, groups may continue to require employees meet a threshold before the probationary period begins.

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General Purpose
Health Net's National Medical Policies (the "Policies") are developed to assist Health Net in administering plan benefits and determining whether a particular procedure, drug, service, or supply is medically necessary. The Policies are based upon a review of the available clinical information including clinical outcome studies in the peer-reviewed published medical literature, regulatory status of the drug or device, evidence-based guidelines of governmental bodies, and evidence-based guidelines and positions of select national health professional organizations. Coverage determinations are made on a case-by-case basis and are subject to all of the terms, conditions, limitations, and exclusions of the Member's contract, including medical necessity requirements. Health Net may use the Policies to determine whether, under the facts and circumstances of a particular case, the proposed procedure, drug, service, or supply is medically necessary. The conclusion that a procedure, drug, service, or supply is medically necessary does not constitute coverage. The Member's contract defines which procedure, drug, service, or supply is covered, excluded, limited, or subject to dollar caps. The policy provides for clearly written, reasonable and current criteria that have been approved by Health Net's National Medical Advisory Council (MAC). The clinical criteria and medical policies provide guidelines for determining the medical necessity criteria for specific procedures, equipment and services. In order to be eligible, all services must be medically necessary and otherwise defined in the Member's benefits contract as described in this "Important Notice" disclaimer. In all cases, final benefit determinations are based on the applicable contract language. To the extent there are any conflicts between medical policy guidelines and applicable contract language, the contract language prevails. Medical policy is not intended to override the policy that defines the Member's benefits, nor is it intended to dictate to providers how to practice medicine.


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The Policies do not constitute medical advice. Health Net does not provide or recommend treatment to Members. Members should consult with their treating physician in connection with diagnosis and treatment decisions.


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The Policies do not constitute authorization or guarantee of coverage of any particular procedure, drug, service, or supply. Members and providers should refer to the Member contract to determine if exclusions, limitations and dollar caps apply to a particular procedure, drug, service, or supply.


Policy Limitation: Member's Contract Controls Coverage Determinations.
Statutory Notice to Members: The materials provided to you are guidelines used by this plan to authorize, modify or deny care for persons with similar illnesses or conditions. Specific care and treatment may vary depending on individual need and the benefits covered under your contract. The determination of coverage for a particular procedure, drug, service, or supply is not based upon the Policies, but rather is subject to the facts of the individual clinical case, terms and conditions of the Member's contract, and requirements of applicable laws and regulations. The contract language contains specific terms and conditions, including pre-existing conditions, limitations, exclusions, benefit maximums, eligibility, and other relevant terms and conditions of coverage. In the event the Member's contract (also known as the benefit contract, coverage document, or evidence of coverage) conflicts with the Policies, the Member's contract shall govern. The Policies do not replace or amend the Member contract.


Policy Limitation: Legal and Regulatory Mandates and Requirements
The determinations of coverage for a particular procedure, drug, service, or supply is subject to applicable legal and regulatory mandates and requirements. If there is a discrepancy between the Policies and legal mandates and regulatory requirements, the requirements of law and regulation shall govern.


Reconstructive Surgery
California Health and Safety Code 1367.63 requires health care service plans to cover reconstructive surgery. "Reconstructive surgery" means surgery performed to correct or repair abnormal structures of the body caused by congenital defects, developmental abnormalities, trauma, infection, tumors, or disease to do either of the following:


1. To improve function; or
2. To create a normal appearance, to the extent possible.


Reconstructive surgery does not mean "cosmetic surgery," which is surgery performed to alter or reshape normal structures of the body in order to improve appearance.


Requests for reconstructive surgery may be denied, if the proposed procedure offers only a minimal improvement in the appearance of the enrollee, in accordance with the standard of care as practiced by physicians specializing in reconstructive surgery.


Reconstructive Surgery after Mastectomy
California Health and Safety Code 1367.6 requires treatment for breast cancer to cover prosthetic devices or reconstructive surgery to restore and achieve symmetry for the patient incident to a mastectomy. Coverage for prosthetic devices and reconstructive surgery shall be subject to the copayment, or deductible and coinsurance conditions, that are applicable to the mastectomy and all other terms and conditions applicable to other benefits. "Mastectomy" means the removal of all or part of the breast for medically necessary reasons, as determined by a licensed physician and surgeon.


Policy Limitations: Medicare and Medicaid
Policies specifically developed to assist Health Net in administering Medicare or Medicaid plan benefits and determining coverage for a particular procedure, drug, service, or supply for Medicare or Medicaid Members shall not be construed to apply to any other Health Net plans and Members. The Policies shall not be interpreted to limit the benefits afforded Medicare and Medicaid Members by law and regulation.

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