There seems to be some confusion among employers regarding ACA compliance and employee health plan waivers. The confusion stems from the requirements of the Affordable Care Act (ACA). Hopefully this clears up the confusion for our current clients and those looking for a health plan solution.
As you know, the ACA was signed into law in 2010. Though the law is incredibly complex, the provision that many are familiar with is the mandate for employers above 50 to provide a health plan that meets minimum standards.
Employees Can Waive Health Benefits
The most important thing to know is that employees do have the legal right to waive health benefits. The ACA does not require individuals to purchase health plans through their employers.
Having said that, it is usually beneficial for employees to purchase a health plan through their employers in order to take advantage of cheaper group rates. But there are valid reasons for not going this route. For example:
• Spousal Coverage – An employee may be covered under the family policy of a spouse or partner. Purchasing additional coverage would not make sense.
• Family Coverage – Younger workers under the age of 26 can be covered by their parents’ health plan under the ACA. It would be normal for such workers to waive employer sponsored plans.
• Independent Coverage – There are instances in which a worker can get a better policy at a better rate by purchasing on the individual market. This usually affects workers who also run their own businesses on the side. They get a better plan through their own companies.
• Health Sharing Plans – There are a number of health sharing plans i.e. Zion Health that, while not technically health insurance, do qualify under the ACA. A worker may belong to a health sharing plan that is more affordable than the employer sponsored benefit plan.
As an employer, ACA compliance is really a matter of making sure you are offering a qualifying plan to all eligible workers.
How to Accommodate Employee Waivers
An employee can only waive health plans at specific times: at the start of employment, at the next enrollment period, at any point the employer offers a new or changed plan, or when the employee’s family status changes. When an employee does attempt to waive coverage, you have certain responsibilities as an employer mainly to provide and collect a health plan waiver form which Planstin will provide.
ACA compliance requires employers to offer qualifying health plans to their workers. But the law does not force workers to purchase the coverage. They can waive health coverage if they qualify for an exemption or have other means of coverage.