Employer Liability – Waivers

Health plan “waivers” are a very important requirement to protect employers from liability.

What is a waiver and what does it do?

The waiver is a legal document that states the employee has been offered health coverage and is declining coverage.  If an eligible employee does not complete a waiver form, thereby officially declining the offer of health coverage, they could later demand to be covered under the companies benefit plan.    The health insurance company will not allow the employee to enroll until the next open enrollment period (without a special circumstance).  This puts the possible liability for the employee’s health care costs on the employer.

Two Types of waivers:

1. Legitimate waivers:

Employees who decline coverage because they have other coverage through an employer group of Medicare are counted as legitimate waivers.  The most common legitimate waiver is someone who has coverage through their spouse’s employer’s plan.

Non-legitimate waivers:

2. Non-legitimate waivers count as a non-participant in the employer group’s participation requirement with their insurance carrier. Most carriers (including CalCPA Health) require a 75% participation requirement.

Non-legitimate waivers are employees who decline coverage and do not have other group coverage or Medicare.  Individual coverage, including individual coverage through Covered California or another ACA exchange, does not count as a legitimate waiver.