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Opt-Out Incentives: The Ins and Outs

By Julia M. Vander Weele

As annual open enrollment season approaches, many employers may be evaluating ways in which to control rising health plan costs. One strategy frequently considered is a financial incentive for employees to waive or opt out of the employer-sponsored group health coverage. Although such “cash-in-lieu” or “opt-out” arrangements have long been common, they raise potential problems under the Affordable Care Act (ACA), as well as a number of other federal laws.

The ACA 'Employer Payment Plan' Issue

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