What is ACA Conditional Opt-Out and Why Employers May Be Confused?
The Affordable Care Act (ACA) has provisions to help young adults stay on their parents’ health insurance plans until they turn 26. One of these provisions is the Conditional Opt-Out. This allows young adults to decline employer-sponsored health insurance if they meet certain conditions.
Unfortunately, some employers may be confused about the Conditional Opt-Out and believe it is illegal. This is a misconception. The Conditional Opt-Out is a legal way for young adults to stay on their parents’ insurance plans.
Conditions for Conditional Opt-Out
To be eligible for the Conditional Opt-Out, you must meet the following conditions:
You are under 26 years old.
You are eligible to be covered by a parent’s health insurance plan.
You have declined employer-sponsored health insurance.
You are not claimed as a dependent on your parent’s tax return.
Employer Responsibilities
Employers are required to provide affordable health insurance to their employees. However, they are not required to cover young adults who are eligible for the Conditional Opt-Out.
If you are eligible for the Conditional Opt-Out and your employer offers affordable health insurance, you must decline the employer-sponsored coverage in writing. Your employer may then offer you a cash payment in lieu of health insurance.
Employer Confusion
Some employers may be confused about the Conditional Opt-Out because it is not a common practice. Additionally, the rules surrounding the ACA have changed frequently in recent years.
If your employer is confused about the Conditional Opt-Out, you can provide them with the following resources:
IRS Publication 974: [Premium Tax Credits for Health Insurance Coverage](https://www.irs.gov/pub/irs-pdf/p974.pdf)
[ACA Conditional Opt-Out](https://www.healthcare.gov/young-adults/children-under-26/)
Seek Professional Help
If you are still having trouble with your employer, you may want to seek professional help. You can contact a licensed agent to help you understand your options and ensure that you are getting the coverage you need.
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