Employees Who Waived Your Health Plan: Should They Take Another Look for 2027?

Written by Jeff Thibadeau

Most small employers have a few people who waive the company health plan. Some are on a spouse’s plan. Others found a Marketplace plan that, with a tax credit, cost less than their payroll deduction.

So should those employees take another look for 2027? For many of them, yes. The extra federal subsidies that made Marketplace coverage so cheap expired, and 2027 Marketplace premiums are going up again. Your plan won't be the better deal for everyone, but this year's decision deserves fresh math, and your open enrollment is the window to do it.

What's changing

From 2021 through 2025, enhanced premium tax credits made Marketplace (HealthCare.gov) plans much cheaper for a lot of working families, including people earning above 400% of the federal poverty level. Those enhanced credits expired at the end of 2025. According to KFF, people above 400% of poverty no longer qualify for any premium tax credit, and finalized benchmark silver premiums are rising an average of 13% for 2027.

Here in Iowa:

Congress may revisit the subsidies in January, but I wouldn't plan around it. Any change would likely come after most people have already picked 2027 coverage.

One related rule: if you offer coverage that meets the federal "affordable" and "minimum value" tests, the employee generally can't get a Marketplace tax credit at all. For 2027, coverage counts as affordable if the employee's share for employee-only coverage is no more than 10.22% of household income. Some employees who waived may have been counting on help they weren't eligible for.

What I'm seeing with Iowa employers

In renewal meetings this fall, I've been suggesting that employers put a short note in front of staff before open enrollment that says, in effect, "If your Marketplace help changed, take another look at our plan before you decide." It's simple, and it gives people permission to ask.

Why this matters more for contractors

  • Hourly pay that moves around. Overtime in the busy season and slow weeks in winter make it hard for an employee to estimate annual income, which is what Marketplace tax credits are based on. Guess low and they may owe money back at tax time.

  • Recruiting and retention. Skilled labor is hard to find. If your plan looks better this year than it did last year, that's worth saying out loud to the people you already have.

  • Field and office split. Office staff usually read the enrollment packet. Field crews often don't. A two-minute conversation at the shop or on the jobsite can do more than a stack of paperwork.

Timing: why your open enrollment is the window

An employee who waives your plan generally can't jump in mid-year just because their Marketplace premium went up. Federal special enrollment rights apply to specific events, like losing other coverage, marriage, birth, or adoption, and usually come with a 30-day window to request enrollment. A higher price on a plan they chose isn't one of them.

If your plan renews January 1, your open enrollment is running at the same time as the Marketplace's. Wait until February and the decision is made for the year.

Questions to ask before open enrollment closes

  • Do I have a current list of who waived and why? (A waiver form that asks for the reason helps.)

  • Have I shown each employee their actual 2027 payroll deduction for each coverage tier, not just the total premium? (See how to think about employer contribution strategy.)

  • Do employees know the Marketplace deadline for January 1 coverage is December 15, and that our plan's enrollment deadline may be sooner?

  • If several waived employees come back, does that change our carrier participation picture or our budget? (If budget is tight, here's how I'd prioritize benefits spending.)

How to bring it up without pressure

You don't need to sell your plan. You also shouldn't give tax advice about anyone's household. What works is short and factual: tell people the Marketplace rules changed for 2027, show them what your plan costs them per paycheck, and invite them to compare. Then respect what they decide. Some employees will still be better off on a spouse's plan, and that's fine.

Frequently asked questions

Can an employee who waived our health plan enroll in the middle of the year?

Generally only if they have a qualifying event, such as losing other coverage, getting married, or having a baby, and they request it within the plan's window (usually 30 days). Otherwise they wait for your next open enrollment.

If we offer health insurance, can our employees still get Marketplace tax credits?

Not if your coverage meets the federal affordability and minimum value standards. For 2027, affordable means the employee's cost for employee-only coverage is no more than 10.22% of household income. Employees should confirm their own situation on HealthCare.gov or with a tax professional.

When is Marketplace open enrollment for 2027 in Iowa?

November 1, 2026 through January 15, 2027 on HealthCare.gov. To start coverage January 1, people need to choose a plan by December 15.

Need help reviewing who waived and why?

If you have crew members who waived your plan and you're not sure what to tell them for 2027, I'm happy to help you put together a simple comparison and a short note for your team. There's no pressure to change anything. Schedule a benefits review and we'll look at it together.

Sources

This article is intended for general educational purposes and should not be considered legal or tax advice. Employers should consult the appropriate professional regarding their specific circumstances.

Jeff Thibadeau
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