Opting Out of Medical Insurance Coverage
A benefit eligible employee can Opt Out of medical coverage and receive cash in lieu of medical insurance coverage. PEBB determines the amount of cash paid to an employee who Opts Out of medical coverage. Opt Out cash is included in employee income and is subject to taxes.
Opting Out of medical coverage is an enrollment choice, it is not an enrollment in a PEBB medical plan.
PEBB can require eligible employees who enroll in Opt Out to also enroll in other core benefits, such as dental, vision, and employee basic life coverage. Opt out enrolled employees who enroll for a core benefit plan are responsible to pay any premium share required.
Eligible employees choosing to enroll in medical Opt Out must have minimum essential medical coverage for themselves and all other individuals for whom the employee can reasonably expect to claim a personal tax exemption deduction for. The alternative medical coverage must be a group sponsored medical plan. The employee must attest to the coverage at enrollment and annually thereafter.
The agency or PEBB will cancel an employee’s Opt Out enrollment when the attestation is not completed during initial enrolment or annually during the open enrollment period. If the Opt Out election is cancelled:
The agency will enroll a new benefit eligible employee in the Employee Only tier of a PEBB medical plan that provides statewide coverage. All other employee plan elections will take effect as enrolled.
When the Opt Out enrollment is to replace an enrolled employee’s PEBB medical plan, the employee and any eligible dependents will reinstate to the previous medical plan. All other employee plan elections will take effect as enrolled.
An employee is not eligible for Opt Out if their alternative group medical coverage is one of the following Medicaid, Veterans’ Administration Health Benefit Programs, Student Health Insurance, or individual market coverage.
An employee enrolled in Opt Out will not receive money in lieu of a PEBB medical plan enrollment when he or she is in a leave without pay status, regardless if the leave is a protected leave; e.g., FMLA, CBIW, Military Duty, etc., or other administratively approved leave.
Employees enrolled in Opt Out experiencing a federal HIPAA Special Enrollment Right event are eligible for a qualified midyear change medical plan enrollment, for example, a loss of group medical coverage, or a change in family status such as a birth, adoption, etc.
A PEBB retiree enrolled in the PEBB retiree or COBRA plan receiving a premium subsidy, such as an early retirement premium subsidy, returning as an active benefit eligible employee, and choosing to continue coverage under the retiree or COBRA plan is not eligible to enroll for Opt Out as an active employee.
Opt Out cash will not be paid if the agency or PEBB has knowledge or reason to know that the employee or any other member of the employee’s expected tax family does not have or will not have the required alternative coverage.