Everyone has heard about waiting periods, but few are familiar with the specific term “waiting period.” If you are not familiar with a waiting period, then it’s a period of time between the time an employee joins your company and the time they can begin taking advantage of the benefits the company provides.
Waiting periods are terms you may have heard but don’t know exactly what they mean. There are typically two types of waiting periods: a pre-established waiting period and a post-established waiting period. The former is when a policyholder has a pre-established time period to use the benefits, while the latter is when the benefits are made available after the policyholder has been deemed to be eligible to receive them.
What Is A Waiting Period?
Waiting periods are a big deal in the world of work. Waiting periods are an important safeguard that ensures that eligible applicants are not immediately eligible for benefits from the start of a period. Also, they have the effect of making benefits available to the public in a more orderly fashion.
The laws of the United States dictate that anyone seeking unemployment benefits from the government must first wait a certain amount of time. That time period is often referred to as a waiting period. The length of your waiting period may vary depending on which type of benefits you are applying for. When you are applying for unemployment benefits, you have to wait a certain number of weeks before you can get paid. This waiting period is intended to give you enough time to find a new job.
Types Of Benefits a Qualifying Waiting Period Could Apply To
Several benefits employ a waiting period. Here are a few organizations, insurance, and government benefits that generally use a qualifying period:
- PTO
- Health insurance
- Disability
- Unemployment
Health Insurance
Employers and insurance companies can often require a waiting period before coverage begins. This can be for a variety of reasons, including a waiting period to “ensure the health care needs of the insured” or for status verification, which can be a requirement in some states. The rules are different from one plan to another and from one state to another, so it is important to find out what will be required of you before you can enroll in a health plan.
PTO
Most employers allow their employees to receive their regular wages when they take time off from work. This is called Paid Time Off (PTO). For many employees, it is a critical part of their PTO policies. It allows them to take time off from work, while still being compensated for it. It is a popular benefit to receive from their employers, as many believe it helps to alleviate stress during the workday.
Unemployment
When you sign a contract with your employees, it is up to you to decide when they can start and end their employment. Some businesses use a specific waiting period between signing and starting their employees, some have their employees sign an employment contract, and others even require a physical exam before actually starting the job. Each type has its advantages and disadvantages. Whenever your employees voluntarily quit their jobs, they are responsible for paying federal and state unemployment taxes on behalf of their employers.
Disability
In the United States, disability insurance is a benefit provided to employees by their employers as a result of an injury or illness. The insurer pays benefits to the employee, who then receives a check that is payable at the end of the policy period. The entire purpose of a disability plan is to provide compensation to employees who become disabled. A disability may be temporary or permanent. Long-term disability plans, sometimes called permanent disability plans, pay benefits to employees who are permanently disabled, regardless of the cause. Short-term disability plans, sometimes called temporary disability plans, pay benefits to employees who are temporarily disabled, based on the insured’s inability to work because of an accident, illness, or disability, usually for up to 12 weeks.
If you want to have a better understanding of the waiting period, attend the Compliance Prime webinar.
