A plan management best practice is to collect and store employee waivers when an employee chooses not to enroll on the group health plan, even if the insurer or TPA does not require employers to submit them. These waivers serve as documentation of the employer’s offer of coverage and the employee’s decision to decline it.

If the employer is an Applicable Large Employer (ALE – 50 or more full time and full-time equivalent employees), subject to the Affordable Care Act (ACA) employer shared responsibility mandate, the employer must offer coverage that provides “minimum essential coverage” (MEC), “minimum value” (MV) and is “affordable” (by ACA standards) to eligible full-time (FT) employees and dependents (excluding spouses). A violation of the mandate is triggered when an eligible FT employee gets coverage on the state individual Exchange and receives a Premium Tax Credit (PTC) to subsidize the cost of the coverage. This could result in employer shared responsibility penalties. For 2025, the penalty for not offering MEC/MV and affordable coverage is between $2,900 and $4,350 per employees per violation.

Collecting waivers is important even for non-ALE employers (less than 50 employees) because any offer of affordable coverage to an eligible employee would make that employee not eligible to receive a premium subsidy in a healthcare exchange.

In either case, if the employee told the Exchange he/she was not offered MEC/MV and/or affordable coverage, the employer will want a signed waiver on file to submit to the IRS as proof of the health plan offer.

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 form, 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

*Diversified Group’s enrollment form includes a waiver section that the waiving employee must complete.  This form is sufficient when completed properly. 

Waivers may need to be signed annually, and employees may need to advise their plan provider if their situation changes. An employee that has previously opted out by signing an insurance waiver, can elect to participate in the health plan during the next open enrollment or if they have a qualifying life event under Section 125 or a HIPAA Special Enrollment Event (such as gaining a new dependent).

It’s important for employers to collect and store employee waivers for employer-sponsored health insurance because it documents that the employer offered coverage and the employee chose not to enroll. Waivers can also help employers prove compliance with federal and state regulations.

Please feel free to contact your Diversified Group Account Executive for any additional guidance or questions on waiver form best practices.

DG Compliance