Health Insurance Waiver

What is it, and how does it work?

Opting out of health insurance coverage with Health Insurance Waivers
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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. 

Key Takeaways

  • You may have to sign a health insurance waiver every year to acknowledge that you have been offered healthcare but have chosen not to get it.
  • You may want to use a health insurance waiver when you get your health insurance through another source, such as through a spouse.
  • If you don't have another way to get health insurance, you may want to consult your HR department about whether it's in your best interest to waive insurance.

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. It 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 is 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.

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, also known as an "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

Beware: Waiver of Healthcare Coverage May Affect Eligibility to Plans Under the Affordable Health Care Act

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.

Frequently Asked Questions (FAQs)

How do I waive student health insurance?

The paperwork your university sends you to sign up for a health insurance plan will usually include a waiver form as well. If you do not need health insurance through your school, you can sign the form and send it back with your other paperwork. You may need to provide proof that you are covered under another insurance plan.

How long does an insurance waiver take?

How long it takes to process your health insurance waiver will depend on the company handling your application. A processing time of one to two weeks is common. If you fill out your forms online, these will often be processed more quickly than forms you mail in.

Can I take back a health insurance waiver?

If you waive health insurance because you are covered under another plan, but then lose that coverage, you may be able to submit an application to rescind your waiver. The time frame for doing that, and whether it is allowed at all, will depend on the program offering the insurance plan.

Article Sources

  1. Sullivan Benefits. "Health Plan Enrollment Rules," Page 10.

  2. City of Milwaukee Department of Employee Relations. "Waiver: Health and/or Dental Coverage," Page 1.

  3. Centers for Medicare & Medicaid Services. "Minimum Essential Coverage."

  4. Harvard University. "Waiving Health Insurance Coverage."

  5. Harvard University Student Health Program. "Waiver FAQs."

  6. University of Massachusetts Amherst University Health Services. "Waiving the SHPB."

  7. CSU Health Network Colorado State University. "SHIP Waiver Process - Frequently Asked Questions."