Effect of employee not making coverage payment?


What happens when an employee fails to make their contribution for coverage?


If an employee fails to meet the payment or deduction, the employer needs to notify them in writing that their coverage will be terminated unless full payment is received.

  • Under the public policy concept of shared responsibility that underpins the ACA employer and individual mandates, employers have to offer affordable coverage and employees are expected to contribute their share of the cost.
  • At the minimum, the employer must give the employee 30 days to respond.

Once coverage has been terminated because of non-payment by employee, the employee may become eligible again if they are tested in the next measurement period and meet the 30 service-hour-per-week threshold.

Prior non-payment of an employee’s share of health coverage for their self-only coverage does not negate their ability to receive future offers of coverage if they are determined to be eligible.


This Q&A was first published by ACA Insights' Helen Karakoudas on September 28, 2016 in a LinkedIn Pulse article titled "In the world of ACA compliance, every day should be Ask a Stupid Question Day."