What is Your Effective Date?
The effective date is the date at which your insurance policy begins, or becomes effective. Prior to this date, even if your application has been approved, you do not have access to your new health insurance coverage. This means your health care policy will not begin covering any portion of your medical expenses.
When Your Effective Date Starts
In general, the date that your policy becomes effective is after your first premium payment has been made. This date is determined by your health insurance company, so it can also be the date that you applied for a policy or the date that your application was accepted.
In some situations, if you're going through your employer for health insurance, there may be a waiting period before your insurance policy becomes effective. This can be anywhere from 30 to 180 days, and it's generally determined by the employer. Someone at your company, usually one of your Human Resources representatives will have the information available.
Examples of How an Effective Date Works
Let's say that you've applied for an insurance policy and the provider has accepted your application. The insurance provider, in this example, doesn't consider your policy effective until you've made your first premium payment.
If you decide to go to the doctor before you’ve made you first premium payment, you may be expecting to have your doctor's visit covered. However, since the policy isn't effective (again, because you haven't made your first payment), your visit won’t be covered under your new health insurance plan, and you can be left footing 100% of the bill for the medical services you received. This is why it is so important to be aware of when your effective date is.
Backdating Your Effective Date
Backdating is when your health insurance provider pushes back your effective date. For instance, if your policy application was accepted and it took you a week to pay the first premium, the insurance provider may backdate your effective date to the day of acceptance.
Backdating is up to the insurance company, but they'll normally be transparent about whether this is possibility. If they don’t mention the effective date, or the possibility of backdating, make sure to ask them.
Where to Find Your Effective Date
When you are comparing insurance plans, you will normally be able to tell when a provider will consider your policy to be effective. Additionally, once you have had your application accepted and you receive coverage documents from your provider, they should specifically detail what date your policy becomes effective. If you cannot find your effective date in your in the documentation provided by your health insurance, you can give them a call to find out when your coverage kicks in.