Not every employee will elect health coverage during open enrollment. Some are covered under a spouse’s plan, some are on Medicaid, and some simply don’t want coverage. As an employer, you need to know how to handle waivers properly.
Get It in Writing
Every employee who declines coverage should sign a written waiver during open enrollment. This protects you from future claims that an employee wasn’t informed of their coverage options. Most carriers and benefits platforms include a standard waiver form.
Understand Why They’re Waiving
The reason for the waiver matters. Employees waiving because they have other coverage (spouse’s plan, individual marketplace plan, Medicare, Medicaid) are simply using other options available to them. Employees waiving because they “can’t afford it” may be signaling that your employee contribution is too high — worth paying attention to.
Participation Requirements
Carriers typically require a minimum percentage of eligible employees to enroll in the group plan (often 70–75%). Employees with other group coverage can usually be excluded from this calculation (they count as “satisfied” rather than declining). Make sure waivers clearly document the reason.
Spousal Carve-Out Provisions
Some employers implement a spousal surcharge or carve-out — requiring employees whose spouses have access to their own employer-sponsored coverage to either enroll in that coverage or pay a higher premium to join your plan. This is a cost-containment strategy worth understanding.
Waivers Don’t Mean Gone Forever
Employees who waive during open enrollment can typically re-enroll during the next open enrollment — or if they experience a qualifying life event (like losing their spouse’s coverage). Make sure employees understand this so they don’t feel locked out forever.
Need help structuring your enrollment process? Garden State Benefits handles waiver documentation and carrier submissions as part of our open enrollment support.