What is it and how does it work?
BY MILA
ARAUJO Updated October
31, 2019
Definition: A health insurance waiver is a document
that when signed provides the option to opt-out of a health insurance plan offered to you by
making a formal request. This could apply to health insurance group plan that
you are being offered as part of a program, your employer, school or other
organization. Health insurance waivers are not available in all circumstances
and may have specific requirements to qualify.
What is a health insurance waiver form?
A health insurance waiver form will usually
contain information regarding your request to waive access to a health
insurance plan being offered to you. The health insurance waiver form will
include your declaration that you have been offered a plan, however, have
chosen to refuse the health insurance coverage being offered to you. Depending
on the organization or reason for your health insurance waiver request, you may
also be required to provide proof of the reason that you wish to waive health
insurance benefits.
This is for the protection of the
organization, company or school that is offering you the plan. They may want to
verify that you have adequate health insurance elsewhere before approving your
health insurance waiver request. Health insurance 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.
Waiving medical coverage: Is it a good idea?
There are many reasons you may decide that you
want to waive your health insurance coverage, but before you do, it is always a
good idea to look into the advantages of dual coverage or coordination of benefits. Sometimes it can be
more beneficial to take advantage of multiple plans if you have a lot of
medical costs or specific needs. Always explore all your options. Let's look at
some examples of when you might want to request a waiver:
Examples of When You Might Want to Request a Health Insurance
Waiver
·
When your employer
health insurance plan or student health insurance plan is not required
because you already have insurance through another plan. For example, if your
spouse has a health insurance plan that already covers you, you might request a
health insurance waiver because you do not need the coverage your school or
employer is offering you since you are already insured elsewhere.
·
If you have the
opportunity to obtain better health insurance coverage elsewhere, either
through an individually purchased plan or through a family member. You may
be required to prove the alternate insurance coverage.
·
If you are eligible
for a plan that meets the Minimum Essential Coverage (MEC). MEC is any health
insurance plan that meets the minimum requirement of the Affordable Care Act.
·
If you are covered by
your parents' health insurance plan
·
If you are already
covered or eligible for services through an Indian Health Services
provider
·
If you are a member of
a religious sect with objections to insurance
Health Insurance Waivers and College or University Health
Insurance Plans
Although employers do not offer health
insurance waivers as much as they used to, universities tend to have health
insurance waiver opportunities. Students enrolled in equal or better health
insurance plans than the one offered by their college or university usually
have the option to waive the health insurance by filling in a health
insurance waiver form and providing proof of comparable coverage elsewhere.
This is a popular option for students since they are often covered by a family
plan, and the cost savings of waiving health insurance can amount to thousands
of dollars a year.
Health Insurance Waivers Through Your Employer
Because of tough economic times, many
companies are cutting back on health insurance waivers or eliminating them
altogether. Health insurance waivers used to be popular among employers
attracting employees. This was when companies offered health insurance benefits
free to their employees.
Now that most employees pay a portion of their
health insurance and that companies are on a tighter budget, medical insurance
waivers are not as common. The cost of medical insurance waivers is now hurting
employers more than being a benefit to an employee.
When is a health insurance waiver an advantage?
Some companies, usually local government
employers, offer medical waivers as part of an employee benefits package. If an
employee chooses a medical waiver they could receive an extra yearly payment
that would be a percentage of what the company pays for the employee's
insurance coverage. Some of these medical waiver benefits are as high as $7,000
per year.
Medical or Health Insurance Benefit Waiver from Your Employer
Employer-sponsored health insurance plans can
be a significant advantage for employees, especially when the employer pays for
part or all of the health insurance coverage. However, there are times when a
person may not need the medical plan from their employer, for example, for an
employee who lives in a household that already has a plan covering the family.
In this case, one insurance plan may be all that is needed.
Signing a Health Insurance Waiver as a Strategy to Save Money or
Gain Income
The health Insurance waiver is sometimes
viewed as an employee benefit because by waiving insurance, some employers have
offered to compensate the employee for the financial value of the cost of
insurance. Unfortunately, due to the economy many employers do not offer their
employees fully paid insurance benefit packages, therefore the popularity of
this type of employee benefit or perk is not as common as it once was when the
economy was stronger and employers offered health insurance benefits for
"free." Signing a health insurance waiver may not provide any
advantage in regard to your employee benefits in the form of a salary
"increase" anymore since many employers do not pay for their
employees' health insurance benefits like they used to. The waiver may
instead reduce the costs of deductions from your payroll for your insurance
since you will be covered under an alternate plan and not paying into the
employer plan.
Example: Jim and Tina both work. Jim chooses the health
insurance waiver from his job since he is covered under Tina's
employer-sponsored health insurance plan. In return, his employer gives him an
additional $3,000 per year payment. Also Known As opt-out,
buyback
What if you waive health insurance coverage but your
circumstance changes, can you still enroll?
Every health insurance policy s different, so
you would have to check with your plan administrator to find out if you waive
the health insurance, if you can re-apply or be added to a group benefits plan
if your circumstance changes.
Before you sign a health insurance waiver, make sure you fully
understand the consequences of your opt-out
Carefully read the waiver to make sure you
understand what you are signing off on. A health insurance waiver usually
applies to the person signing the waiver and their dependents, you can not pick
and choose who will be covered or waived. Pay particular attention to any
clauses which relate to changes of circumstance, like having a baby, or if your
spouse changes employment, or your family plan changes unexpectedly.
Your health insurance waiver may include a
clause, for example, if your family situation changes, you gain a 30-day window
to enroll due to your change of circumstance.
Examples of Changes in Circumstance That Impact Health Insurance
and Choices
·
Pregnancy, Adoption
or Birth
·
Change of spouse or
parent's employment benefits
·
Death of a dependent
or spouse
·
Marriage, legal
separation or divorce
·
Gain or loss of employment or loss of eligibility
for coverage due to a reduction in hours or leave of absence or layoffs
Waiving health care benefits may make you
ineligible for subsidized healthcare under the Affordable Health Care Act.
Making an Informed Decision Before You Waive Health Insurance
Coverage
The decision to waive health care benefits
from an employer or other organization is significant. You want to make sure
you are protecting your best interests and analyzing all your insurance options to
choose the best coverage. Be sure and review the specific details of how your
employer-sponsored benefit plan would cover you, how much it would cost and
what advantage if any you might get if you sign a health insurance waiver
before you waive your right to the health insurance plan. Your HR department or
student services department or health plan administrator would be in the best
position to outline costs and benefits for you.
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