Q.- Why should employers who provide a cash payment to employees who decline medical coverage get proof that the employee has coverage elsewhere?
A.- Employees should be asked to show proof of other health coverage when opting out of employer insurance primarily ACA compliance, allowing the employer to exclude cash opt-out payments from their plan's affordability calculation. This helps avoid potential penalties and ensures the remaining offered coverage is considered truly affordable for the employee. Without proof, the employer must count the cash incentive as part of the employee's premium cost, potentially making their offered plan unaffordable under ACA rules.
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