Do my employees need to waive coverage and why?


In the 4th quarter of 2018, according to the Bureau of Labor Statistics (BLS), medical benefits were available to 69 percent of private industry workers and 89 percent of state and local government workers.  Employee benefits have been proven to attract and retain top talent in most organizations.


Offering a health plan isn’t just an attractive small business employee benefit. It might also be your responsibility. You must offer health insurance if you have over 50 full-time equivalent employees, according to the Affordable Care Act.


One question we often receive during open enrollment and with new hires is “do my employees need to waive coverage and why?”  The simple answer is “Yes”.  Waiving coverage protects you as an employer and further documents the fact that you offered a health plan that was waived.


Why would an employee waive coverage?

There are many reasons employees could have for opting out of a health plan offered. They might have a spouse who has a qualified health plan, they might still be on their parents’ plan, or might receive coverage through other means.

If an employee wants to opt out of employer-sponsored plan, they must complete a waiver form. The employee must include information like their name, Social Security number, who they are waiving coverage for, and why they are waiving coverage on the waiver of coverage form. Then, the employee must sign and date the form.

Does this protect me as a Company?

This is for the protection of the organization or company that is offering you the plan. They may want to verify that you have an adequate health plan elsewhere before approving your health waiver request. Health waivers may have to be signed on an annual basis, and in the event that your situation changes, it may become part of your agreement that you advise your plan provider.