Considerations if an Employee Declines Coverage (Waives) for a Lookback Measurement Period
For look-back measurement method if an employee waives coverage during the administrative period, they have essentially waved coverage for the entire subsequent stability period. This is the biggest reason that stability periods tend to follow health coverage plan years. If the employee declines the initial offer of coverage, they can be treated as having declined coverage during the entire health plan year.
Like all rules there are some exceptions. Life events can open up a special enrollment period and could void a previous waiver. Examples of qualifying life events are:
• Moving to a new state
• Being on someone’s else’s health plan and that person loses coverage
• Change in family size – getting married, birth or adoption of a child
• Turning 26 years old and no longer eligible for parent’s coverage
• Taking or returning from a leave of absence
• COBRA coverage from another employer expires
• Eligible for or loses Medicare or Medicaid
• Gaining membership in a federally recognized tribe or status as an Alaska Native Claims Settlement Act (ANCSA) Corporation shareholder.
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