Many employer groups will be going through Open Enrollment and renewal periods as we progress through the fourth quarter and close out 2018. They’ll be relying on their health insurance brokers to help them more than ever.
With all the upcoming activity, health insurance brokers will certainly have a lot of enrollment forms, change forms, and waivers to collect from employers and their employees this season.
While not all carriers require employee waivers, it is always in the employer’s best interest to collect and store employee waivers when an employee chooses not to enroll on the group health plan. These waivers serve as documentation of the employer’s offer of coverage and the employee’s decision to decline it. Online enrollment programs offer a very helpful solution for collecting and storing employee waivers. Paper records work well, too.
If the employer is an Applicable Large Employer (ALE), subject to the Affordable Care Act (ACA) employer mandate, the employer must offer Minimum Essential Coverage (MEC) that provides “minimum value” (MV) and is “affordable” (by ACA standards) to eligible full-time (FT) employees and must offer MEC to those full-time employees’ dependents. A violation of the mandate could result in excise-tax penalties for the employer, which are triggered when an eligible FT employee gets coverage on the state individual Exchange using a Premium Tax Credit (PTC) to subsidize the cost of the coverage.
Collecting waivers is important even for non-ALE employers. Any time an employer of any size makes an offer of affordable MEC/MV coverage to an eligible employee (and an offer of MEC to that employee’s dependent children), that employee and his or her dependents are not eligible for a PTC. If a PTC is given to an employee who was offered affordable MEC/MV coverage through his or her employer, that employee may be required to repay some or all of the PTC if the IRS is notified of the employer’s offer of affordable coverage via IRS Form 1095-C. If the employee told the Exchange he/she was not offered affordable MEC/MV coverage – perhaps due to confusion concerning the ACA’s definition of “affordable,” which does not take dependent coverage into consideration – the employer will want a signed waiver on file to submit to the IRS.
Word & Brown has a resource to explain the offer of affordable coverage and what the offer means to employees. The Important Considerations for Employees before Deciding to Waive Coverage is available in English and four other languages. As a reminder, the ACA Individual Mandate penalty is not reduced to $0.00 until January 1, 2019, so it is important for individuals to have the required MEC through 2018.
Below are recommended best practices for employers sponsoring group health coverage:
- Have eligible enrollees who are not enrolling in coverage sign a waiver, even if the health insurance carrier does not require it.
- Make sure the employee’s name is printed on the waiver, so it can be easily determined who the waiver belongs to if the signature is illegible.
- Ensure there is a signature date on the waiver form.
- Consider drafting a company-specific form for each employee to sign, including details on:
-When the Open Enrollment/renewal took place
-The plan options offered to the employee
-A place to mark either “enrolling” or “waiving” coverage
Rely on your WBCompliance team for all compliance-related help in the fourth quarter. The team can be reached at 866-375-2039 or via email at ComplianceSupport@wordandbrown.com.